As a photographer, I get asked this question quite frequently. They have a digital point & shoot or used to shoot with a Canon AE-1 or an old Pentax 35mm and they're thinking of making the upgrade to a digital SLR. Often, the asker is wanting me to narrow down their options and make their actual choice. Canon Rebel XT? Nikon D5100? Sony A55? My answer usually surprises them. I tell them I can't recommend a camera.
Why? Simple: what works for me may not work for you. The reason(s)? Features. Price. System. Personal preferences.
What type of photography do you enjoy? Do you normally use your camera for vacation pics? Are people more interesting than things or places? Will you be shooting your kid's events? Are you an artsy person? All these things make for different set of features.
A person who feels an artistic drive will likely need the highest resolution they can afford. And perhaps a lens with more than the slightly wide to slightly tele range. Someone interested in people pics should probably get a good flash right away, instead of relying on the built in flash. Sports & kid's events shooters should think about longer lenses and dust removal. Scenic lovers might benefit from wider angle lenses or a camera having panoramic capabilities. Vacation photogs would do well with a great all in one lens and a full featured but easy and compact camera.
Knowing what type of photographer you are or want to be, you can then start looking at cameras. A good place to start is online. DP Review is a great site. Has most of what's out there already tested. Reviews from real users. And an archive of older reviews. Nothing wrong with a year old camera if it's the best choice for you.
Where should you buy? Well, that's your dollar. eBay has many good deals, as do online camera stores. Even Sams Club and Best Buy are fine. You might want to see how the camera feels before swiping the card or inputting your PayPal info. Please be kind to any salespeople. And if you're at a brick and mortar full service camera store, realise that they don't work for free. Their slightly higher prices reflect their higher level of service, before, during, and after the sale.
So, you're wanting a digital SLR ... What did you get?