I guess it kinda depends on what you are going to do with it. I bought the D60.
-If you take a lot of pictures using flash you may want to go with the D40. However, the flash sync speeds on the D60 are more than adequate and not an issue for me at all. You should also be aware (as i recently found out), that you will not like the results of flash photo's from the onboard flash. Too much reflection and light augmentation. You don't know it yet, but you will most likely end up buying the SB400 and bounce the flash off the ceiling instead of people's faces.
-You may also notice that you don't have enough range with the stock 18 - 55 lens. You will then need to crop some images to get in closer. This is where the 10 megapix comes in handy on the D60. You can crop and preserve image quality, whereas you are more limited at 6 meg pix. In addition, the D60 has a VR lens.... this is a better lens...
-You may then take your camera out for a walk and really notice that 55mm is not enough. You will then most likely walk over to your camera store and buy the 55 - 200 vr so budget for this..... even 200mm really isn't enough if you want a tight zoom on a bird high up in a tree.... but if you get the D60 there is room for cropping
-You will then notice that you are changing between the two lenses quite a bit... you may find 18 - 55 handy indoors and the 55 - 200 handy outdoors.. this is where the dust reduction system may be more of an advantage on the D60....
-After you missed a few good shots because of wasting time fitting the right lens and filters, you may then inquire as to a more multipurpose lens and stumble upon the Nikkor 18 - 200mm VRII lens. This solves most of your dust problems (because you will mostly use that lens), and your missed shots problems (due to lens changing), and the focus ring is bigger + override the autofocus with the ring.
-You will then need to find someone to buy your 18 - 55 and 55 - 200 lenses.
If your anything like me.... and you want to save money and hassle...
Buy the body only of the D40 or D60
Buy the SB-400 Flash
Buy the 18-200VR lens
and make a deal with your retailer for buying all this at once.
This may seem expensive at first... this is what you will most likely do anyways and buying the other lenses will just cost you more.
Good Luck from one Noob to another!!..