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No need a 10mp cam , I also have a Canon EOS 400D , but I seldom use its 10mp large fine mode or RAw unless I know I will crop a lot .
I think this Nikon has a better looking body with better ergonomic design than that of the EOS, and this Nikon D40 tends to a bit over expose but I prefer it better than the Canon's under exposed images...
Though my Canon is much faster with a better Lens selection , plus , my Canon has more DR(dynamic range) , so both are good in many ways and I love both , just do not use it in complete auto mode, then no exposure problems with those two cameras..
Hope Canon 'll buy a body from Nikon.
I wish I could afford for a 30 D but well, I am poor so I will have to stick with the 400D and D40.
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