I would personally go mirrorless. It would keep it about the same size, but with typically much better quality. Here are the options I would consider for the price points of ~$300 (instead of <$300)
Sony NEX - 3. - But if you don't mind used, you can get killer deals. Craigslist is usually a good place, but KEH.com is a real winner. So is B&H's used department, and to a lesser extent, Adorama's. KEH is usually where I find the best prices and selection.Sony NEX 5n with 18-55mm
- A STELLAR camera with great IQ. Has a touch screen so you can pick your focus point by touch. Awesome feature. -$379Nex 3n with 16-50mm lens
- A pretty good camera, and the lens is okay, but not as good as the 18-55mm. -$310
The Nikon One system is a very good one as well.Nikon One J3 with 10-30mm lens
- Its not as good as the V1, but its decent.
Canon's EOS M is very capable, but not easy to find used. It hasn't sold tremendously well, but if you can find one used, its a very solid pick up. I don't know what the prices are on them, so YMMV.
You could always look at the Micro 4/3's system, also. They tend to be a bit more money, particularly for quality. You would have to settle for the Olympus PEN E model (much lower quality than the OMD's), but capable. Bodies run ~$250 and then a lens on top of that.
If it were me, I would look long and hard at the Sony 5n. Its a bit of a reach, but its an excellent price:performance.
Here is a review
of it. The conclusions are pretty accurate. One thing I would bear in mind is that the AUTO setting on this works awfully well. When I started to get serious, this was my progression:
AUTO - camera makes all the choices
P - camera still makes all the choices, but with a bit less hand holding
A - I set the aperture (you can learn about this later)
M - All manual
Starting in AUTO is perfectly fine. If you want more info on them or books to read, I have some excellent body-specific authors to check out.