I couldn’t be happier with my D40.
I looked at the same canon when buying and found pretty a pretty much unanimous opinion that the canon kit lense is complete garbage. Between that and the universal love for Nikon I went with the D40.
If I could have got a D40x new for the price of my D40 I would have gone that route, but as it was I was already spending more than I probably should have. Looking back though I’m completely happy with the D40 even after having some 8x10’s of my daughter printed at Walgreens. I haven’t tried getting any prints larger than 8x10 but I honestly doubt I ever will.