Got a new camera a few weeks back. On the amateur scale it was creeping up there in price - 2000 - but on the global scheme of things that's cheap. I searched high and low - pretty much in the canon range only cause I already have lenses for my canon cameras. I got the 60D mostly because of the flip screen and it does shit more expensive cameras do etc etc. I like it. I like it alot.
Previous to this camera I mostly was using my phone. Yes, phone. And I'll show you why.
So that's a shot using my phone and processing on an app using red highlights. I love that effect.
But, all fairly reasonable photos taken with my phone. The last one has some post processing OUTSIDE of the phone just for colours but you get the idea of what phones these days are capable. The other thing about phone cameras is that they really are unobtrusive when it comes to shooting people on the street. No one is intimidated by a phone being pointed in their general direction. But a big black thing - *cough* - with a massive lens is intimidating. ALOT of pro photogs know this and use small cameras on the street.
In my mind you're quite capable of getting creative with a phone. Even check THIS one out. But, the advantage I've found in DSLR's is with stuff like THIS and THIS which would be absolute miracle shots with a phone. DSLR's also give you time exposure shots with things like storms and water AND street photo's of moving things. But on the whole, I've found my phone JUST as useful as the canon. Sometimes I even choose the phone over it for a shot.