From what I've read, color reproduction and white balance are not optimal. They have some issues with oversaturation which scared me away (although you should be able to set it to work properly as it's a DSLR). However, they are highly recommended by DPreview, and the in-body anti-shake should come in handy. They do have some interesting lenses, like pancakes, and Sigma makes a lot for Pentax mounts as well. But just read some reviews and decide for yourself. Nikon, Canon, Olympus, Pentax and even Sony all make good entry-level cameras depending on what you think is important.
BTW, if you decide to drop the dslr idea for a while, I wouldn't recommend getting an S5. They're great if you want the controls and need the zoom, but I think they're just too expensive for a non-dslr. You still don't get the ease of use of a dslr. The image quality just isn't close to what a dslr can do, especially high ISO which you might need at parties or indoor sports (it starts geting ugly at 400 because of the tiny sensor). Neither do you get a true wide-angle for landscapes: an 18mm even on a 1.5 crop body will give you a much wider view than the S5 will.
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has in fact upgraded headphones, after waiting for an mx600 for 6 years ;)
NAD C525 > Arietta > HD580
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