I'm a canon shooter so of course I lean towards the rebel. However, just tossing out there, my cousin got a Sony NEX-5N recently and the thing is pretty awesome. It has some features that even my 7D doesn't have, and it's right around your price point. Certainly if you're thinking about DSLR video you might want to consider it, although I don't know if that's of interest to you.
Otherwise, I don't feel like you can go wrong with the basic Nikon and Canon offerings. Whichever one feels better in your hands should probably be the winner.
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