I have the Nikon D40 and love it... It's nice and small for my hands, and does a superior job on photos. It does not have an internal motor for lenses to auto focus, so you need to be careful and buy lenses that are AF-S or the like. I have the kit lens, a zoom lens with vibration reduction, and a new Sigma 30mm prime lens- all that autofocus. My Nikon 50mm 1.8 does not.
Here's a photo straight out of the camera as a raw file:
This will look more vibrant if you choose within the camera to take .jpg
After using the Nikon color profiles (standard)
Here's the photo after applying a Lightroom RAW preset and slight defogging:
You don't need an expensive DSLR to take some great photos... spend the money on the glass (lenses). :-)