In that price range I would just buy a Nikon slim point and shoot. My mom has one for everyday pics and they look great. You don't need a $4k camera to take nice pictures.
Im looking into getting into photography a little also, just for fun and to pick up a new hobby. I found a Nikon D40 for $280 OBO locally. Is that a good deal, or should I keep on looking?
if you can wait and save up more $$ go for the D5000 which sells for about $750 new and $515 used with the kit lens. This lens unlike the D40 takes video so really, its worth the extra money.