Older high end used dslr or a new entry level dslr?

I was a film camera slr enthusiast- did some semi pro stuff in the past. I was using a 35mm film Nikon FM with nikkor prime and zoom glass. Excellent system for my needs-low light, fast lenses. Unfortunately all stolen some years ago (many $$ worth). We now use digital point and shoots for the family and are fine, but for me, very frustrating - especially lag and other obvious things. I have been researching a dslr, have read about nikon d90's, 3100 and Canon D550's, Pentax K-r and K-x. Even looked at second hand Nikon D40 and D200's (also have looked at some favorable reviews about older Canon's).
My needs are a camera with no nonsense manual settings with high quality images; that offers automatic modes for my kids (who I want to teach photography) and for my wife to learn to use (she takes great photos with the point and shoot). Not interested in hybrid cameras.
I want to get a f1.4-1.8 55mm prime lens for the camera.
What used cameras would be a good buy ($400-$900) to build upon? Or should I go for the budget entry level dslrs currently available. I want to build up the system over time. I'm unable to spend $1500+ at sale point on new technology at the moment.cheers

I like my D90, but it has more features (gimmicks) than I need or could ever dream of using.

You started with a Nikon, so I'm going to assume you've got some brand loyalty there. I do too, as that's what I own and shoot with. I like the 18-105 that came with this camera kit. It's a good, all around daylight type lens, and the VR is great when the lighting is low.

Read this guy's website.http://www.kenrockwell.com/tech/recommended-cameras.htm
If I were to start all over again, I would probably spend less on the camera, and more on the lenses.

I wore out a £600 Canon 350D DSLR purchased from new.

I then purchased the cheapest DSLR to replace it, the £300 Olympus E-420.

Clearly the old Canon was better but the newer Olympus wasn't half bad and it's auto features were miles better than the older Canon. So I have a manual DSLR to get arty with and can flip it to auto for snapshots and benefit from advanced auto features.

I say buy as new as a model as you can personally. But I still prefer Canon though. The Canon EF 50mm f/1.8 lens is excellent as well.

The D200 is a non-nonsense camera with easily accessible manual control. You can always put it in "P" mode for the wife and kids. Heck, I use my D200 and D300 in "P" mode often enough myself. It depends on what I'm doing. The D300 is really superior to the D200, but the D200 is still a wonderful camera. Check prices and see what you can find. I'd lean more towards one of these than a full-on professional model (D2 series or D3 series), because the likelihood of getting a lower shutter count on the D200/300 is better.