Ok, there's a lot of misinformation going on here.
Rafiki: I've looked at the comparison set you've posted on flickr. The photos taken with the kit lens are completely underexposed. You've drawn your conclusions based on an unfair comparison. The photos taken with the 50mm f/1.8 are exposed properly.
What you need to do is correctly expose the photos taken with the kit lens. You're really going to need to slow down the shutter speed to get the equivalent exposure: camera shake will start to creep in then when you're hand holding.
The bottom line is: the 50mm f/1.8 is a much better lens for low light than the kit lens. Shutter speeds will be faster, so motion blur will be reduced. Yes, VR will help reduce the effects of camera shake hand-holding with the kit lens, but it won't stop motion if your subject is moving. If the subject is stationary, you'd be better off using a tripod and not worrying too much about fast lenses or shutter speeds.
I'll be honest here, the example you've posted is a strange one: shutter speed 1/25 indoors hand-held with a stationary subject really isn't a sensible scenario, and is a recipe for camera shake. Either use a tripod for non-moving subjects indoors, or use higher ISO, faster shutter speeds and wider apertures for moving subjects hand-held in low light. Try not to combine the two techniques. The D90 should be good for up to ISO 3200 if necessary.
i found the same. my kit lens kicks the nifties ass when it comes to indoor low light non flash stuff as far as getting unblurry shots goes.
Your hands are shaking and you have a still subject. Try holding the camera steady. If your subject moves, the slow kit lens will give motion blur, whereas the higher shutter speeds available using f/1.8 will freeze motion in much lower light.
my main use will be for portraits and taking pics of family, baby boy etc.
reading the above, is it not that good in low light for indoor use without flash?
the 50mm f1.8 is one of the cheaper primes, and i'll still look at used. i've heard some good reviews on 35mm f1.8, which might be better focal length for limited indoor use, but being more £.
what's a good used price on a 50mm?
The 50mm f/1.8 is Nikon's cheapest prime and second cheapest lens full stop. It is useful for low light, portraits and short tele use (eg street candids) with an effective focal length of 75mm on a crop sensor. In general use I would always take the 35mm f/1.8 AF-S in preference however, due to its more useful 52.5mm focal length, which gives the angle of view traditionally associated with a 50mm lens, when mounted on a crop sensor.
Don't let the comments above fool you, the 50mm f/1.8 is a good choice for low light, although the 35mm will give you less camera shake (if you have poor camera technique) due to the shorter focal length.
Just buy the lens new. 10% discount at Jessops using quidco means it can be yours off the high street for less than £100. Having said that I would recommend the 35mm: although £70 more, it's a more useful focal length, and will autofocus on the D40/D60/D3000/D5000 as well.
only I would remove the word probably.