you might wanna consider the olympus E420.
small light and with the 14-42 kit(which is a very decent kit lense imo) should cost you under $1k
live view, and most importantly a very small body
Doesnt matter which camera you intend to buy actually.
If you're a new to photography, any camera will do.
If you got $$$, get the highest end you can afford.
Go start taking pictures with whatever tools you got, and take the best out of it.
Proceed from there.
Prices are available anywhere in the newspapers and web. Research first.
Dont buy for the sake of one-two snapshots only to be left on the shelves later...
cams are never cheap at comex/IT shows and they give unnecessary freebies as well.
thx for all the comment, i'll read later, meanwhile keep the replies coming thx
for $500 budget is hard to get a dslr..
the cheapest d40 kit is ard $700 if available..
for compacts can consider
canon 860is, fuji f100fd & panasonic lumix fx35? all shld be within range.