I suppose if you’re in the market for a DSLR, and specifically a Canon 40D vs. a Canon XSi, you might ask what’s the big difference? In my opinion, there are a couple things to be aware of when making this choice. For many people these things may not matter, but for others these things may be important.
Canon 40D: larger body, better for bigger hands, slightly more ergonomic/faster to operate due to thumb wheel on rear (vs. the XSi’s hold a button while turning the command dial technique). External flash x-sync of 1/250th (vs. XSi’s x-sync of 1/200th). And 6.5 fps motor-drive. CF card only (vs. XSi’s SD card only).
XSi: 12 MP (vs. the 40D’s 10 MP) and smaller size/lighter weight. Latest and greatest everything (autofocus, dust-reduction, live view). And other usability improvements over previous generation such as larger viewfinder, ISO displayed in viewfinder.
A tough call - if you need speed and usability the 40D may be more appealing, otherwise the XSi delivers a lot of bang for the buck. The flash x-sync may be an issue for some, but at least with Canon’s dedicated speedlites you can use the high-speed sync to compensate.