Nikon D40 is a great beginner camera IMO. A camera with 6 megapixels (i.e. d40) allows for high quality prints as big as 13x19. There are great deals on the web for these.
There are tons of articles as to the benefits and disadvantages of XTi Vs D40's
I have owned both Canon and Nikon and my personal pref is Nikon due to the ease of user interface.
The best advice is to go to a real camera store and pick up both cameras and see how they feel to you. Some people will love the Canon and some will love the Nikon. Find out which one you are. You will be happy with either one, but you will be happiest with the one that fits your hands better.
Just my $.02
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