The 55-200 is a great consumer tele. Also a good travel lens since it's so light and small. It's decent wide open and super sharp stopped down. VR is also nice, especially at that price. It's no f2.8 lens, but anyone who compares the two is off their rocker.
Some samples from when I shot the 55-200 more frequently;
3200 ISO, 84mm, 1/60s (not possible without VR), f4.2 (wide open)
400 ISO, 1/1250, 165mm, f6.3
The 55-200 can be had for increeedibly cheap used. I made the mistake of buying mine new, but even then it's still a cheap lens.
And yeah, the 50mm is the bargain sharp lens. You just wont be able to autofocus on that body.
Edit: Agreed that the 50mm is a great step into primes, but at f1.8 it's not sharp. Doesn't matter though, at $80 (or even double that) it's unbeatable.