Nikon announced a new model to replace their entry-level D40x [which discontinued production in December 2007]. The D40x was really only a megapixel improvement over the original D40 to put a model in the price gap that existed between the D40 and the D80.
The D60 is a 10.2-Megapixel camera and its kit comes bundled with the AF-S DX NIKKOR 18-55mm f/3.5-5.6G VR (Vibration Reduction) Image Stabilization Lens [a step up from previous kits which had lens that lacked Vibration Reduction].
One feature the camera packs that the D40 and D40x lack is Nikon’s Active Dust Reduction System with Airflow Control to help the model compete with other companies who have entry level cameras with this feature.
A couple noticeable drawbacks that weren’t improved upon on the D40(x) that may be a turn off for buyers: The camera still has 3 focus points and lacks an internal AF motor [although given the target audience, this probably isn't considered a drawback].
All in all it appears to be a great camera for anyone making the jump from a point-and-shoot camera. As an entry-level model, it is nothing to trade your current DSLR for.
While they were at it, they also announced three new lenses to their line: The AF-S DX NIKKOR 16-85mm f/3.5-5.6G ED VR, the AF-S Micro-NIKKOR 60mm f/2.8G ED, and the PC-E NIKKOR 24mm f/3.5D ED.
Camera bodies change a lot faster these days. Lenses last a lot longer.
DSLR bodies aren’t discontinued/upgraded at the same rate as Point and Shoot models. The D60′s new features are all features that should have been in the original D40x. Anyways, its new features may not help Nikon [i]gain[/i] market share from Canon. But it will certainly help prevent them from [i]losing[/i] market share to companies like Pentax, Sony, and Olympus.
You say “The D40x was really only a megapixel improvement over the original D40…”
From all the blurb I can find the D40x has the same 10.2 megapixels as the the D60 rather than the 6.1 megapixels of the D40.
This would make your blog entry title correct “… [a D40x with dust control]”
Check out http://www.nikonusa.com/fileuploads/pdfs/DSLR_Compare_2008.pdf
The dust control is the only significant change.