I bought my Nikon D40 two years ago when it hit the market - back then I paid 680€ for it - today you can even buy it for 400€. Now I'm switching to a D300 - but the main reason is that I learned much about photography, not only Shutter, ISO, Aperture etc. but even more about composing etc. and with a D300 you have got more control over your camera - there are more buttons, wheels and they allow you to manually change things much faster.
I'll still keep the D40 - it's handy and the picture quality is great, the D300 isn't much better in that - well it's got more megapixels but this doesn't necesarily mean there is more detail - there is more blurred detail :)
If you are new to photography - the D40 is perfect for you. It shows you the aperture with a nice animation instead of a f/3.5 which helps a lot in the beginning.
It's handy - I had my D40 with me when I hiked with a friend 1 week through Lappland without electricity. This is where i took this photograph:
As you can see you do not need a expensive DSLR camera for taking good pictures - you do not even need to have a DSLR but it helps a lot.
Disadvantages of the D40 - with some lenses, mostly older ones, it's not possible to use the "auto" focus or metering, which means if you set your picture mode to "auto" it automatically adjusts aperture and shutter speed - you have to do this on your own like in the old days. This actually is one reason I bought a D300 - I use lenses like a lensbaby an old but superior Nikon 50mm 1.4 or a peleng 8mm fisheye. With these lenses I have to adjust aperture & shutter manually which takes is time and can be quite frustrating.
The D40x and D60 are fine too (even the D60x will be) and have got some nice features, but if you are low on money buy a D40.
Lenses I use and highly recommend are the Nikon 18-200mm (this is an expensive one) and a Sigma 30mm 1.4 if you shoot at low light (partys ...). There are Sigma 18-200mm as well, I'd buy the one with image stabelizer. If you are low on money try to get a double zoom kit, thats a d40 + a 18-135mm lens instead of the 18-55. the 65mm left to the 200mm isn't that much, you can see that for yourself here.
I know a lot of people agree with me, others don't - perhaps mostly Canon users ;) By the way Canon is nice too, but I haven't had much experiences with it.
Most of my pictures (90%) are taken with the D40 - have a look if you want to:
If you are interested in photography, you should have a look at http://www.kenrockwell.com/
Camera reviews can be found at www.dpreview.com - you can trust those reviews, even if the company belongs to amazon :)
Well then, have fun with photography!