Camera Conundrum

Calling all shutterbugs!

I'm about to buy a new camera; I've narrowed the field of choices down to two, and could use some help deciding between them. I've had an early-generation 2-megapixel Canon Powershot for the last couple of years, and while it takes decent photos in good light, it doesn't do very well under less-than-optimal conditions, especially when the lighting is poor or there's motion in the shot. For this reason I'm leaning towards the Canon S3-IS, mainly due to its image stabilization feature -- not to mention the fact that it's almost half the price of the Nikon. However, the Nikon D-40 is a true through-the-lens digital SLR (the Canon's lens is fixed) and has received rave reviews. Take a look at this table which compares the major features of the two:

Model	Canon S3-IS	Nikon D-40
Type	Digital Point & Shoot	Digital SLR
Megapixels	6.0	6.1
Lens	Fixed, 12X optical zoom (equiv. to 36-432 mm)	Interchangeable, pkg. lens equiv. to 27-82.5 mm
Digital Zoom	4X	No
Image Stabilization	Yes	No
Records Video	Yes	No
Records Audio	Yes	No
Auto-ISO setting	No	Yes
Viewfinder	2.0" tilt 'n swivel LCD	2.5" fixed LCD
Max Resolution	2816 x 2112	3008 x 2000
Battery Type	AA (x4)	Proprietary Li-Io battery pack
Memory	SD Card	SD Card
Price (delivered)	$323.70	$547.70

Nikon's prior models in the D-line (the D-50, D-80, and high-end D-100) with their legendary Nikkor lenses have set the bar for digital photography, and the D-40 is their entry into the lower end of the DSLR market. It's intended for people exactly like me, who have used a point & shoot camera up till now and might be ready to move up, but aren't keen to drop the really big bucks ($700-$1200+) that these models have been selling for in the past. Nikon's real competition to the D-40 has been Canon's Digital Rebel line, which revolutionized the market as the first sub-$1000 DSLR when it came out a couple of years ago. But at $599 for the 6-mP Digital Rebel XT and $799 for the upgraded 10-mP XTi, these models are just out of my price range. If I were a "pro" or even "semi-pro" photographer, I'd probably get the Nikon in a heartbeat -- but the measly photos I take (both in quality and quantity) just don't justify spending that kind of money.

So that's why I keep coming back to the S3-IS. Even though it's still technically a point-and-shooter, it's received excellent user reviews and is quite "SLR-like" in its look, feel, and operation. In addition to the image stabilizer, it also has a much higher zoom level, and will shoot video and stereo audio -- which the D-40 does not. Not only that, but the main advantage of a DSLR is its interchangeable lenses, and to be honest, the chances that I will be wanting to spend a couple of hundred extra bucks on more glass for the Nikon are not that great.

Well I seem to have talked myself out of the D-40, but damn, it's still awfully appealing. It's kinda like buying a Chevy will get you where you want to go just fine, but wouldn't you really rather have a Porsche? Anyone with thoughts, opinions or -- hopefully -- actual experience as an owner of either of these two models, please leave a comment. Thanks.