First of all, I'd like to preface my remarks by stating loudly (and boldly) that I'm a self-professed international camera whore! Okay, now that I've gotten that out of the way, I do want to say that I do not limit myself (or should I say, chain myself) to any one brand. All brands of cameras (well, save for some) make superb cameras and for the most part, it's the person behind the viewfinder who determines the success of his efforts.
Having said that, I have both the D40 (not the x version) and the E510 and I wouldn't give up either one.
I personally prefer the 6 MP D40 because of the larger pixel size, the superb high ISO performance and how it feels in the hand. The images are superb and they often defy the fact that it is only a 6 MP camera. I just keep one lens on it...the rather superb 18-70 zoom lens. My copy has to be tack sharp and I wouldn't trade it for anything. Since this is a Nikon forum (albeit not the DSLR forum), I won't go into in other details of how nice the D40 is...si many know this to be true.
But let me now introduce you to the E510 - a remarkable camera, and you can pick up the body for $475 - can you believe that. We're talkin' about a 10 MP camera with a superb in-body IS system that converts all your lenses into stabilized versions, plus all Oly cams have internal pixel mapping - so if you ever get a dead pixel, just go into the menu and select "map pixels," and within seconds...the issue is solved. Now the case with any other brand - in which you have to send in your camera to have the pixels mapped out...at a cost to you.
Now also include the finest dustbuster on the market (Oly has a patent on it), and you begin to see the makings of a superb DSLR. In fact, it's not uncommon to change lenses on Olympus DSLR's for years and never have a problem with dust - their dustbuster works that well. I had to laugh when other brands used to laugh at Olympus has having lots of gimmicks (like the dust buster, or most recently...live view). But guess what happened on the way to the forums (pun intended)? Now everybody is copying these features - go figure. The E510 has a superb feel to it and everything is logically placed. You can even get a 3rd party battery grip for it (here's a picture below with the battery grip attached):
It should be noted that many people posting on the Olympus forums are dual system owners - meaning they (me included) shoot both Nikon and Olympus cameras and we thoroughly enjoy them both. To limit yourself is really bad and that's why I have nothing to do with the typically self-limiting fanboy types who berate other brands simply because they shoot something entirely different.
One of the biggest attractors to Olympus cameras is how they render colors. There is a certain richness to the colors that once you get accustomed to...it's hard to give up. It originally started by the E-1, which is now a classic for its stunning color, and of course now the latest crop are carrying on the tradition.
Here are some E-510 image samples and towards the bottom are the ISO 800 and 1600 samples. All taken in RAW, AWB, Aperture Priority Mode - and all with IS engaged.
And here are some ISO 800 through 1600 images:
As always - good shooting....
Ben