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@Matt
some good deals on Olympus cameras at the moment in Curry's (yikes), with cheap kits and very reduced telephoto (£80); at least in Camden. Just try and avoid the 14-45mm lens (the 14-42 is much better, and the 25mm is very cute) if you can. Lot of camera and decent optics for your buck - and easy to carry.
Nikon and Canon obviously get you into a bigger system, but if you ain't a pro, that doesn't really matter - unless you like the feel of them more. People get very het up about this, but I think Edscoble is right - it's hard to go wrong with most entry-level dSLRs today.
EDIT: enjoy the d40. Just stuck this info up in case anyone else was hunting around for a camera.