my only gripe with it is that they mention there is no ISO button (you have to dig into the menu to adjust it). I'm constantly changing the ISO, so this little nuisance would drive me up the wall. Other than that, it's more than adequate for a first time SLR owner, and you'll spend years growing into it! Given your budget, this will work well also.
Stick with the kit lens for now, shoot for a while, learn the basics, and eventually you'll figure out how the lens is limiting what you want to do and what lens you want to supplement with. Don't spend your entire budget right now. There are plenty of other things to spend money on, not limited to the following: bag, memory, software, computer, flash, tripod, ballhead, batteries, more lenses, etc. $1K will disappear very quickly.
FOR SALE:
Stasis Tracksports 500F/600R (click picture below)

Just arrived...
2005.5 A4 Avant 2.0T Quattro 6MT
APR 91/93/100 | APR Exhaust | 19" BBS RS-GT's | Carbonio | Partridge-in-a-pear-tree
Others:
>>2001 S4 sold
>>2000 A4 sold
*** September 11th, 2001 - Never Forget ***