If you are serious about photography, Nikon D50x's are within your budget - standard lens is 18-55 but for about an extra $180 or so you can get a Sigma 70-300 which is just stunning!
As always, if not, I'd recommend the iPhone over the N95. It's just so wonderful to use! I know I'll get a lot of flaming and yah-dee-yah but I really do recommend you walk into a store and try one. Big, bulky N95s aren't the nicest but do offer a lot of features, but the iPhone is just absolutely wonderful. I've used one for months upon months and it is just absolutely fantastic! Queue arguments but I stand by my opinion, it's a lot nicer looking, does have a lot of features etc. The camera isn't the best, at 2MP (naturally) but I still really recommend it. Touchscreen is just beautiful and wi-fi is the most handy thing ever built in to the phone!
I can recommend, personally, both of the items above.