I have been searching for months now for my first dslr! I thought i had finally narrowed it down the Rebel xs, but then i found out that i could still get a Nikon d40. Any advice on either? I need to stay under 500 dollars and the d40 seems like a cheaper option. i would like fully manual settings on whatever one i purchase as that is my reason for upgrading. I mainly shoot low light, landscapes, including nautical, and macro. Thanks for any help.
Though I shoot Nikon gear I'd recommend you get the XS because it has a bit better ISO performance than the D40. Compare cameras I would suggest a greater concern is getting a good lens.
If you prefer Nikon, save a little longer and go for the D5000; it's $25 more than your budget and a whole lot more camera. http://www.adorama.com/INKD5000RD.html
I was actually looking to stay under budget. As much as i love the D5000, i wouldn't be able to get the money.