[Noah930]

I purchased a D40 a year ago. Absolutely no regrets on camera choice. I got sick and tired of the limitations of point and shoots. The slow shutter speeds (when trying to take pics of my kids, who are young like yours) really frustrated me. I found the D40 advanced enough that I can use the manual settings and play around a bit, but not so complex and beyond my abilities that I feel like some sort of poseur, either. I don't know if I "miss" the few added capabilities of the D40x and D60 that my camera lacks. Then again, you can now get a D60 for about what I paid for my D40 a year ago. D40 is about $400-450, these days.

nostatic is right about the upgraditis. You start wanting stuff like other lenses (which cost several times the value of the camera you've got), tripods, filters, etc. But, hey, that's a good thing.

One short-coming of the D40, like 87 coupe points out, is that the autofocus motor is in the lens, not the body. So you have to buy Nikon lenses with autofocus motors (unless you're willing to ditch that feature), and can't just stick on other companies' lenses which may be far cheaper.