Quote - (Dazog @ Apr 11 2008, 15:35)

I had both the D40 and the XT.
I prefer the D40, the XT was too large for me.
I decided Nikon has superior lenses for the price they charge over canon.
Also unless you are making poster's i doubt you will miss the extra 2MP.
The d40 is a great starter camera and can be used as a backup when you move up to something more advanced down the line.
Thanks a lot for the help. Like giga said below, I'm going to go to a store to try out both to see which I like better. And good thinking on using it as a backup later on. I definitely plan on purchasing a more advanced camera once I get everything down.

Quote - (giga @ Apr 11 2008, 15:50)

D40: nicer body ergonomics, better kit lens, larger 2.5" screen, friendlier menu system for beginners, auto iso, spot metering
XT: 2MP extra, better noise performance, dedicated buttons for settings changes (rather than in-menu), faster/better autofocus, focus motor (for using AF on older fast prime lens), bracketing (HDR guys use this a lot), depth of field preview,
You can't go wrong with either--I owned both and was happy with either as each have trade off features. Nikon nor Canon have "superior" lens--they're both great and are priced similarly. (though usually nikon a bit higher)
By the way, the XT is
$440 and is black too.
My suggestion is to go to the store and try them both.
Thanks a lot giga. Couple questions regarding what you said:
1. By noise performance, do you mean it produces better pictures in less light?
2. Autofocus - I don't really plan on doing any fast motion or action photography, so should this be a big factor in deciding?
3. Bracketing - Since the Nikon doesn't have it, I can still make an HDR picture with a RAW file, right?
4. DOF preview - this just shows the DOF before you take the picture, right? Whereas the Nikon would show me the image after I pressed the shutter?
And thanks for finding the Canon in black and cheaper. I was looking on Amazon and didn't think of checking on Butterfly.

Thanks so much for the help so far guys. I really appreciate it.