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I'm not sure what the 'going rate' for that camera is.. I'd check ebay.

The kit lens isn't the best, if I were you I'd sell it and buy a 50mm 1.8  A very cheap and very good quality lens.

yep 50mm I use it 95% of the time

I use a D60 with the kit lens get my fair share of rejections  but honestly think its due to my ability rather than the lens  Very good camera for $200 imho

I used to have D60 and used it with Nikkor 35mm 1,8 lens and results were good enough. But images from kit lens were acceptable only after many corrections in Adobe Raw.

Yep Capture NX is very good I now use it for processing but used Paintshop before that - what are the lens prroblems identified?

Thanks for the replies everyone!  I'm going go for it and can't wait to pick it up.  Since the camera and lens is pretty cheap, I might be able to invest in other accessories and lenses for it.

Will it be a major drawback that I'll be limited to buy AF-S lenses only (if I want the auto-focus) since the body doesn't have a motor?  I couldn't find this either, but, if I upgrade to another body with a motor in the future, will I still be able to use those AF-S lenses with motors? 

It depends. If it’s an AF-S Full Frame lens, like the Nikon AF-S Nikkor 50mm 1.4G, you can use it both on DX and on APS-C (Full Frame) bodies. If it’s an AF-S DX lens, it will happen what stormchaser said.

The 50mm 1.8D will be fine on crop bodies and FF. it's called the nifty Fifty and came with every Nikon Made since the late 50's.. Actually sharper than the much more expensive 1.4 or 1.2.[Yes, i've tested and used to review lenses and cameras] The camera is fine. worry more about learning Photography than what to buy. I know lots of folks that make a lot of money using a P&S. But they are photographers and work around the limitations. it's not about the camera. it's about you. Always will be. For not a lot More look at a D-200. Very fine mid level product and wasn't a plastic body. Much more robust. Or get that one and stick a 17-55 2.8 on it and you will be shocked at the image quality. Invest in Glass my friend because Glass stays Cameras are disposable nowdays. Kit glass is not an investment resell is horrible.

With a good camera a lot of people probably never bother to master the basics. They get to grips to some degree with what is impossible to avoid - which is composition and lighting (and you don't even need a camera to learn composition) - but they may never find the need to grasp the relationships between aperture, shutter speed, ISO and depth of field, light ratios, the importance of the hyperfocal distance etc. . The camera's Auto mode makes all those selections for them (or just ignores them).

Actually it is probably the same with a P&S and the workaround will most likely be simply not to bother trying to take a shot if you know the camera can't cope with the conditions. 

However great the photographer, he or she won't be able to "work around" the inferior image quality.

I think there is a lot to be said for learning the basics in completely manual mode and preferably with a prime lens, a polarised and a few ND filters, so you really do have to think of everything. But that is purely about learning the craft. You don't expect a quality product from an apprentice and you shouldn't expect to get showpiece work while you are, for example, experimenting to find out the effect of the diffraction limit on macros. All that stuff then goes into your mental toolbox and allows you to visualise what you can make of a scene.

However, 99.9% of people probably have no interest at all in learning the fundamentals when they can just point their camera at what they see and get something that looks similar when they click the button. For them there is nothing much wrong with Auto on an expensive camera because they aren't interested in any sort of fine control over the final image.