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.