Maxbhp: As Samurai said you should go for a prosumer camera, learn all the tricks with manual controls like aperture value, shutter speed, metering mode, white balance..etc and then go for a SEMI professional one.
Here's some camera's you can choose from:
(Prices mentioned are by grey market in chennai)
Prosumer Cameras : Canon S3 IS, S2 IS, Sony H1, H2, H3, Finepix S5600, S9600 etc...
Suggested model : S3 IS(16400 INR+1 GB Sandisk 950 INR + Unicross 2300 1000 INR)
Semi Professional : Canon 350D, 400D, Nikon D40, D50, D70, D80, Pentax K10D, K100
Cheapest one Nikon D40 (25K). Canon 350D (29K) 400D (35K)
Before choosing the camera make sure the size of the camera is comfortable for you to hold. If the camera is too small for your hand you cannot take your best shot.
A zoom camera atleast 10X will be very helpful and will suit all occasions. Twistable LCD display (like the one in S3 IS) will give you great comfort. Though this feature will help clicking some shots from great angles, if you get too much used to this then you might find it difficult when you upgrade to a DSLR. Note that you will only be using the view finder to take pics and only the previews can be seen on the LCD display.
The picture quality of the S3 IS is very good and especially the skin tone's will come out naturally and beautifully. It has loads of options to work and enjoy, believe me you can get very creative with options like color swap etc.. The battery life is also very good.
If you are looking more towards an entry level DSLR you can first try out the FujiFinepix S5600. It is a better camera for those who have unsteady hands. Its easy to use and has 10X Zoom (5 MP). It has all the manual controls and the costs only 12K. (Quite hard to get in chennai).
Check this link for some pics that I cliked with this camera.
cars and bikes Photo Gallery by Navin Kumar at pbase.com
After mastering the manual controls then you can opt for a DSLR like the canon 450D, 400D which are excellent cameras.
The following link will take you to my gallery and most of the pics are taken in Canon 350 D.
Flickr: Photos from Navins
Hope I did not confuse you with lot of information. You can read reviews about almost every camera from this website
Digital Camera Reviews and News: Digital Photography Review: Forums, Glossary, FAQ .
Enjoy Photography!!