No matter what machine, you can't just scan a picture in and it stitch out a design. Digitizing is a whole other can of worms - and you can use pretty much whatever digitizing program as long as you practice - which I don't do so I don't digitize .... I tried and didn't get past the learning curve. I just did not catch on...
For digitizing programs, there is Embird - has a free 30 day trial, there is another one that used to be *free* called Stitch Era I believe it was called.. there are also higher end programs that the dealers sell....
You can get a Brother with a 5x7 hoop at Walmart.com for $700. It takes a USB to transfer designs which is sweet. If you can help it, don't bother with cards and card readers - usb's are much easier to come by and a lot cheaper ;)
I have had 2 different Janomes and a Brother. I like both companies. Just get the biggest hoop you can afford.