Best Option for Budget DSLR Upgrade

I'm pretty happy with my Coolpix 7900, but in some more demanding
situations
it isn't quite up to the job (low light, action at a distance, etc).

I'm wondering what my best options are for an upgrade without spending a
whole lot of money.  I'm seriously considering going with a used camera so
that I can focus more on the overall performance and less on the features.
 

I do know a moderate amount about photography/optics/etc, although I'm
unlikely to become a serious enthusiast.  Any camera I buy will spend more
time on a shelf than in my hands, so I don't want to overdo it.  However,
I
would like to be able to take decent pictures of kids concerts/etc which
the compact digital just isn't going to handle.

With the Canon Xsi coming out I suspect that there might be an increase in
used sales of the Xti and other pretty capable cameras.  Perhaps with the
savings on the body I might be able to invest in a better-quality lens
(which I suspect will have a big impact on performance).  Granted, some of
the newer DSLR cameras with live preview modes would be nice to have (I
know the pros/cons - sometimes in family shooting situations you just have
to hold a camera over your head or whatever and that doesn't work well
with
a viewfinder).

What would people around here advocate in this kind of situation?  Should
I
just save up and buy something nicer?  Should I consider an even older
camera model and spend a lot more on the lens (and then maybe upgrade the
body at a later date)?  I can't really afford to just spend a lot of money
for something I won't use, but if I can see the value I might spend a
little more.  The D80 actually was appealing to me (I know somebody who is
quite happy with theirs), but I'm not sure I really want to go into that
budget range.

Or am I looking at this all wrong?  Should I just buy a bigger camera
without exchangeable lenses and save money with a moderate increase in
performance?  I suspect that long-term the DSLR will save money with the
ability to recycle components, but then again I don't plan on buying $900
lenses either...