we were at your crossroads several months ago. I broke down and bought a Canon EOS 30D. my wife is a stickler for quality shots, and when I sat her down w/ the first set I’d shot, she said “we should have done this 4 years ago” (referencing the birth of our first child). she’s continuously blown away (as am I) at the quality and capability of the DSLR. we still have our Canon PowerShot SD630 so we can capture movies (and for when we don’t want to lug the DSLR around), but it’s taken a seat way at the back of the drawer.
SLRs are a major pain to be sure. you have to lug them around and they take up a bunch of space. I do flashless photography (loads of its own challenges), so I don’t have to cope w/ the flash problem.
with all that said, I gladly strap the 30D to my back whenever we head out. the ratio of killer shots I capture now, versus pre DSLR is uncomparable. life is too short!