TrustedReviews has a review of the Nikon D40x which gives the thumbs up to Nikon and writes-

“Of course the key criterion for a digital SLR is image quality, and here the D40x really shines. The 18-55mm f/3.5-5.6G ED II lens is significantly better than the lens supplied with the EOS 400D, and combined with the improved image processing of the D40x it provides a fantastic level of fine detail, superb contrast and flawless colour reproduction.
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In the D40x Nikon may finally have got the entry-level DSLR that can give Canon a run for its money while holding off Sony’s advance. It is, by an admittedly narrow margin, a better camera than the EOS 400D in many respects, including the crucial area of overall image quality. It is easy to use, has Nikon’s traditional fantastic build quality, and performs superbly well. If you’re looking for an SLR for under £500 the D40x should be near the top of your list.”

Nikon D40x 10.2MP Digital SLR Camera with 18-55mm f/3.5-5.6G ED II AF-S DX Zoom-Nikkor Lens