I think the new model E420 is better than E410 which the new model will give D40x a stiff fight. of course the E510 is better than these two models but costs more.
Nikon D40x or Olympus E410?
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bousozoku
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The notable additions are the Active D-Lighting and the (not so effective) dust reduction that are used on the more expensive Nikon bodies.
However, the What Digital Camera review gave it worse results than the D40x.
Do note that the D40X is using the same sensor as the D80. Here a good read : http://www.bythom.com/D40REVIEW.htm
it depends on what you want. all in one lens has its purposes. entry level cameras has its purposes. how much are you willing to give up to be happy and take the shots you want? will lugging around many lenses and a heavy camera make your day? will taking a light combo make you happier? only you can decide for yourself.
Based on most real tests conducted by reviews, it performed much better in low light due to it's Nikon EXPEED processing which is not found in D40X.
Without the built-in Image stabilization, E420 is still not appealing to those who eyeing the Nikon, my thought though. Ya, E510 is in a better position.
yea... i think E510 is in a btr position to differentiate from Nikon D40x. Moreover it costs $160 more than E410 as wat it shows in Alanphoto site. (might expect a slight drop or more freebies becuz E520 has juz recently be announced) IS might not be tat useful for low light shooting but it definitely helps in 1 & another way. + the SSWD which is very well a useful feature for user like me who hate frequent cleaning. But I dun wan to promote Olympus becuz I am an user of tat. So it's still up to u..!! haa 
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