Here's the problem. Point & Shoot cameras all use little itty bitty sensors that really hamstring the cameras when it comes to low light performance. The lenses on P&S cameras, even good ones, are good but not great. All of this is just fine & dandy when the P&S camera costs $150 or $250. By the time you're spending $400, you're putting a lot of money into a camera that just doesn't have $400 worth of overall image quality.
The DSLR, even though it is more money, uses a larger sensor and better lenses. Compared to my A720, a DSLR is a lot of money, but if you're talking $400, then you're getting within spitting distance (sort of) of a "real" camera.
I believe the best DSLR for those stepping up from a P&S is the Nikon D40 (not x). IQ and usability is head & shoulders above the P&S. I sold mine used for $425 with a skylight filter, extra battery and a case. The only drawback to the camera is lens compatibility. That camera is AF with only some of the Nikon lenses. Also, Nikon glass is more costly than Canon glass. But, if you treat the D40 like a P&S (i.e. never put a different lens on it) then it is an absolutely wonderful little camera that works better and produces better images out of the box than the Rebel XTi.
In summary, I recommend either spending less than $400 on a P&S (I love my A570. SX100 is also sweet) or use your $400 to pick up a used D40. If you decide you want other lenses, sell the D40 later and move to a Canon Rebel XTi (used) so you have access to the world of Canon lenses.
stay happy.
