I hung onto film with my Nikon FE2 well after digital SLRs got hot. In all honesty, I would have made the switch sooner, but finances kept me from making the transition.
When the time and prices were right, I wanted to make sure that I got the most for my money and wanted a camera that felt as comfortable as using my FE2. Since this was my first digital body, I wanted to choose very carefully what system I was getting into, which is to say Nikon vs. Canon. As expensive as the body is, the lenses are where the money really gets spent over time.
My decision to go with Canon hinged on 3 basic features of Canon as a whole and of the 40D specifically. First was the image quality of Canon digital SLR's. Canon SLR's tend to have very low noise at high ISO settings. This is a great quality and enables me to not get tied into using low ISO settings and slow shutter speeds. At the time of my purchase, there was around a 2 stop advantage for Canon compared to an equivalent Nikon body, which is to say that ISO 800 on a Canon had noise similar to ISO 200 on a Nikon. Since that time, Nikon has greatly closed this gap in performance and noise is not a limiting factor for either major brand.
Image quality goes beyond just noise and resolution. Canon cameras tend to have a color and hue quality that is more subtle and natural when compared to Nikon. It is hard to describe, but the final images seem to have very gentle transitions from color to color. Nikons tend to be more harsh. I know that with post-processing, either camera brand could be modified so that images looked similar, but I just liked the palate of colors produced by Canon.
The second thing I liked about Canon was the control layout. Canon tends to minimize their buttons and make buttons have multiple features by pressing combinations of buttons. Nikon, on the other hand, tends to make each feature have its own dial or button. Everyone has a different preference between the two schools of thought, but I could pick the Canon up and easily change aperture, ISO, and exposure compensation on the fly with no instructions. This was not the case with Nikon, especially when trying to apply exposure compensation. With the 40D, exposure compensation is always available by turning the main command dial on the back of the camera - easy!
The third reason I choose Canon over Nikon is the lens selection. I knew I could only afford a cropped sensor camera and that I would want a lens specific to the smaller sensors. I wanted image stabilization (IS), and I wanted a very sharp and very fast lens. All these requirements led me to the Canon EFS 17-55 F2.8. Nikon did not have, and still does not have, a midrange zoom lens that can do what this lens can. I used it, liked it, and knew that Canon was my choice to be able to use this lens.
The Canon 40D sensor produces a 10.1 megapixel image. The camera industry pushes image resolution as the end-all to image quality and this leads many people to purchase or upgrade cameras solely based on this number. Of all the variables that make up a final image, I doubt many are truly held back by not having enough pixels. If you wonder if your camera has enough resolution, the answer is probably yes, and you will not gain much with a higher resolution sensor.
The 10.1 megapixel sensor in the 40D is plenty for making very large prints and preparing images for display on the web. I honestly would not want more resolution as this would probably come at the cost of higher image noise.
Again, taking good pictures is rarely limited by your equipment and is almost always limited by your creativity and skill. Nikon, Canon, and other camera manufacturers want you to think that shooting at 6.5 frames per second vs. 5 will make you a great photographer; it won't. As we just discussed, they want you to think that 15 megapixels is a big jump up from 10; it really isn't that big of a deal.
The approach I am going to take is to try to get my skill level up above the abilities of the camera. If I can get to that level, then I will think about upgrading. Until then, I will enjoy the 40D and not worry about what camera is coming out next.