For point and shoots I have been very happy with my Leica Dlux3. It retailed in Dec for $599 locally here in Seattle. If you look at my tank thread it is a mix of pics from the Leica and a Nikon D70 with 105mm macro lens. A DSLR will get you closer but sometimes it is just
too much equipment to be dragging around and you just want a good pocket camera.
blasphemy to some, I know The LCD is awesome and well protected and when I purchased the Leica it was the only P&S on the market shooting RAW format. The casing is metal instead of plastic. It has a macro mode for the lens and the flash is adjustable. The menus are far easier than any I saw when looking at Nikon and Canon P&S. That said here are some pics hot off the memory card. If these shots don't satify the urge for closeups than by all means get a DSLR.
I am a huge Nikon fan mainly because the menus make more sense to me than Canon. They both have a range of wonderful choices in the DSLR world.