Actually, the K110D is the one without image stabilization. The K100D has IS with all lenses and is probably the same or cheaper due to a rebate (there's no rebate on the K110D). At least check, the K100D is available from Beach Camera with lens for just under $400 with lens - an amazing bargain. I would definitely go for the K100D rather than the K110D to get the stabilization.
There is a fair amount of upgradability, not only to the very nice K10D, but Pentax will be announcing some new DSLRs in October and I think it's safe to assume that at least one will be a higher-level one than the K10D.
Small buffer is a drawback, but I think that's the only one. Positives include IS with every lens, very good kit lens, some good buys on lenses, and of course, price. Image quality is superb as with all DSLRs. FWIW, the sensor is basically the same as used in the 6mp Nikon DSLRs.