I love my D40 and 18-200VR lens...
18-200VR is why I went Nikon instead of Canon.
the image stabilzation is of marginal use on the Pentax, this i know from a real user's experience. that's why i disregarded it in my decision. other then that, feature for feature, D40 is about where the pentax is at... and nikon makes better glass. although the d40 is missing the top lcd panel, i dont think its that big of a deal. since i have small hands, big cameras feel awkward to me, so im partial to the D40, which fits like a glove. however, if you have big hands, you should look in to the d50 or some such. anyways, whatever you pick , it should be good.