I went through the same thing last year. I had my trusty Pentax ME Super and a bunch of lenses, but it was time to go digital. I could buy a Pentax and re-use my existing lenses (all manual, though), or go Nikon or Canon and re-do it all. I chose Nikon for the following reasons:
1) great quality
2) huge support base
3) tonnes of nice lenses and stuff available
4) I could buy one locally from an actual photography store, and did not have to go to Future-ripoff or any similar box shop.
I actually never even really considered a Canon, simply because Walmart sells them, which means I will not be able to get professional support and accessories here. (once Walmart starts selling stuff, no-one else can get it).
If you are looking to spend around $1000, it gets a little tricky. I chose to go with the D60/18-55 and have some $$ left over, but now I am starting to miss a few features available in the D90 and higher (no, video is not one of them, and not really concerned about the higher MP ratings, either.)