$399 - Used Nikon D40 + 18-55 VR Lens
$599 Nikon D40 + 18-55VR & 55-200 VR Lenses
I'm sure there are a few people who can attest to how awesome the D40 is. Both options include the same camera and lens kit - the second includes another lens to cover a longer zoom range than the first kit.
Don't be scared to go used as long as you do so from reputable sources like B&H and Adorama. And I'm sure there are comparable - if not better non-Nikon (Canon) kits out there.