I like the D40 a lot and was giving lots of consideration to this model. However, I wanted something with more MP - hence, the D80. I like to blow up my pics to 20x30 or a tad bit larger. Will I be able to do this with a 6MP camera??? I do, however like the price of the D40. I like the looks and feel of the D60, but the three camera shops I have visited have told me to stay away from this model.
I have 3-foot wide prints from my D40 that look great. I seriously can't tell the difference between my 3-foot wide 6MP D40 prints and my 3-foot wide 10MP D80 prints. The only concern with big prints on 6MP camera is that you don't have much leeway for cropping, like if you're trying to zoom in on your kid who's at the opposite end of the soccer field and your lens isn't long enough. The 10MP sensor will give plenty of leeway for cropping. Otherwise the 6MP sensor cameras are superior. They have lower noise levels, are a stop faster in normal operation (ISO 200 vs 100), and have superior 1/500s flash sync vs the 10MP which only do 1/200s with the flash. This is critical in my house where we have a direct wide open east/west facing and get a lot of light in the house with harsh light and deep shadowing on faces. It's a cinch to balance it out with 1/500s flash sync, but is difficult with only 1/200s. Also if your kids are running around and you need fill flash, 1/200s might not be quick enough to freeze their action whereas 1/500s would be. All of these reasons are why I specifically bought a D40 (and not the D40x which was out at the same time) as a secondary body after getting my D80. My D80 actually sits at home most of the time now because the D40 just plain works better for me in daily use. Better noise performance, faster base ISO, faster flash sync, and its more compact so I can squeeze it into my smallest camera bag with a nice big pro lens on it, lol.
For shooting kids you'll probably need the flexibility of zooms more often than not, so the lens limitation of the D40/D40x/D60 cameras needing specifically "AF-S" shouldn't be of much concern. Nikon has a very nice lineup of AF-S zoom lenses at all price levels, and a lot of them are far better optically than the non-AFS lenses they might be replacing, so you're getting more for your money anyways. The only thing you won't be able to use (with autofocus) on the D40/40x/60 are Nikon's prime lenses, most of which are still "AF" or "AF-D" and not AF-S, and thus won't autofocus on these cameras. If you like the Nikon bodies better you can get a D50 or D70 used which don't have this limitation, or step all the way up to the D80.
Still, lack of autofocus didn't stop me from plopping my 50mm f/1.4 AF-D lens on my D40 the other night and snapping this picture of my daughter and manually focusing. :mrgreen:.
She
never ever sleeps on that side. Normally she sleeps on her other side facing the wall so I can never get cute photos like this.

I could have used my D80 which would have autofocus with this lens, but I used the D40 becasue it has better high ISO noise performance, it was so dim that I didn't think the AF would work well anyways, and most importantly because the D40's shutter is much much quieter than the D80's. Had I shot with the D80 it would have startled her and I probably wouldn't have gotten that shot. Took a few shots to get the camera dialed in properly before I got this one.
Between the D60 and D80, get the D80. It's only $50 more and you get much better compatibility with Nikon's lens linesup even if it ends up not being very important, and overall it's a more capable body. So my recommendation is to either get a D40 or step all the way up to a D80 and skipping the D40x/D60. Or if you're ok with getting a used body, the D50 is a perfectly good camera too, as is the D70.