CraigK
Established
Canon makes 130,000 Rebel XT's per month at the specs you listed to get the price down to $1000
Actually the camera I am thinking about would not have a fraction of the bells and whistles of the Rebel. , No autofocus, no autowind, no program modes (other than perhaps Aperature Priority) no interchangeable lenses, no pentaprism, no depth of field preview button, no internal flash, no autofocus assist beam, no multisegmented metering no multiple af focus spots, no autobracketing, no...well you get the idea.
Just weld a chip into an updated QL body, tack a screen on the back (that you can choose to show colour or black and white playback thank you very much) and leave all the do-dads and widgets to the dSLR guys and gals.
I'd call it the digital Kiss (keep it simply simple)