I'm with you, WM I got a camera comparable to the one you guys are talking about here and then invested much more into lenses. I've found it to be a good trade off for me, I owned the Canon 5D (full frame digital) for a while but ended up getting rid of it and just sticking with my little Rebel XT.
You're right about the focal length, most digitals have a 1.6 crop factor so you get more distance than you would out of your lense as opposed to full frame (or 35mm). The trade off for that though is that you don't get as much in compared to typical 35mm (or full frame).
Here's an example, the red would be full frame while the blue is cropped to 1.6:
But if you get a nice wide angle lense it won't be much of an issue.