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They are great cameras for the money, however they run a seperate kind of lens mount, and you won't have but 2% of the total pool of lenses available to you - if your comparing the XT to the D40, you might want to get the XT (can't believe I just said that).
Well, it's not that they (Nikon D40) use a separate lens mount, it's that it uses the Nikon F-mount, but Nikon removed the autofocus servo on the camera itself, so you can only autofocus with AF-S/AF-I lenses. Still, it does severely limit the pool of lenses you can use if you want autofocus.
Personally, I'd recommend a Nikon or Canon, they both have great lenses (I still pine for an equivalent of the Canon 70-200 F/4L). Sony's A100 is pretty much a successor to the Konica Minolta line, but I have zero experience with them.
In this case I'd go with an XTi, even if it's a little smallish, but I have giant hands.![]()