Interchangeable lenses - You can get a 18-200 mm (10x) zoom or separate wide angle 10-22mm and telephoto 70-300. You can also get faster (f/1.4) lenses which are better in low light (4 times the light gathering) than the typical f/2.8 in point and shoot cameras.
Faster - Startup, focusing, continuous shooting, less than 1/2 sec. shutter lag.
DSLRs usually use Phase Detection type autofocus sensors which which can determine correct focus immediately rather than Contrast Detection sensors used in most P&S models which must adjust the lens and compare contrast at different positions.
Less noise - larger sensors practically eliminate noise at ISO 400 and 800. Although some point and shoot cameras now have multiple ISO settings, they are not as good at hi ISO.
Accurate, large, and bright optical viewfinder.
The ability to add filters (polarizing, haze, ...)
Nikon and Canon are the two most popular; Pentax, Olympus and Sony
are also popular.
But, sticking with Nikon and Canon will give you more choices of lenses and accessories. You may even be able to rent lenses for them.
"At many points in time Canon makes slightly more advanced bodies, but in virtually every photographic situation you'd end up taking the same picture with either the Canon or Nikon" acording to Philip.greenspun.com.
Some professional photographers claim Nikons will produce better pictures.
Nikons have an auto exposure mode which compares a scene with a database and selects the best exposure value for that scene.
More sports photographers seem to use canons (Canon may offer them a better discounts), however ?? switched to Nikon just before going to Beijing to photograph the 2008 Olympics.
The Nikon D40X (around $500 [body only]) and D80 (around $800) have got the best ratings recently amongst the entry level and prosumer cameras, but the Canon equivalents EOS Digital Rebel XTi ($520) and EOS 40D ($1,150) are close behind. ConsumerReports rated the image quality of the Canon 30D higher than the Nikon D80 and the XTi and D40 and D40x the same.
See DSLR Resolution and Noise Comparaison at KenRockwell.com. He says:
"I ran this test because newer photographers have been asking me for years worrying about the noise performance of Canon vs. Nikon and CMOS vs. CCD sensors."
There are some minute differences if you look really hard at these extreme blow-ups. In real photography they will look the same as each other. If you have the time to waste worrying about these minutiae, you're probably very new to photography.
3 to 4 megapixels is enough for a decient 8x10 print, so why the megapixle escalation?
See The Megapixel Myth: at photography in the Hobbies section
I concentrated on lenses in choosing a camera. The bodies are like personal computers they will be obsolete in 3-5 years, where your lenses should last a lifetime (almost).
The Nikon Nikor lenses have had a good reputation and many photographers have stuck with Nikon because of their investment in lenses.
Canon seems to be slightly ahead in the high end lenses ($1,500-$6,000) now and a lot of professional photographers are switching to Canon.
For the average photographer it varies by focal length. For any given length the Nikon lens may beat the Canon or vice versa.
I wanted something in the range of a f/1.8 prime lens for low light, a 28-135 mm zoom and a 12-24 mm wide angle zoom. Canon seemed to have the best combination for this configuration.
If you want one zoom lens from wide angle to telephoto, Nikon's 18-200 mm might be the best choice.
The kit lens, 18-55mm, that comes with the low end Nikon camera kits is rated better than
the kit lens with the Canons.
Some lenses are categorized as digital lenses. Olympus has come up with a whole category of lenses referred to as the four thirts format for digital.
Others have identified digital lenses as those which better anti-reflective coatings to avoid the problems with internal reflections from digital sensors which are more reflective than film.
Some design lenses which are optimized for the smaller APS-C sensors.
Canon EF-S lenses get the glass closer to the focal plane which allows smaller, lighter, less expensive lenses. Howevever these lenses can't be used on the high end cameras with full frame sensors because they will intefer with the mirror.
Nikon DX lenses are also designed for smaller sensors.
Extra wide angle lenses will be DX or EF-S lens.
In the 90's Nikon was seen to have the "added advantage" over Canon due to the former's decision to retain the Nikon F-mount and have backward compatibility between older manual focus Nikkors with newer AF camera bodies and vice-versa.
Now, it is the reverse for the two giants as Canon's EOS System is backward compatible with both the analog and digital EOS formats while Nikon is slowly phasing out its manual focus lenses and encouraging its users to move toward the new generation of AF Nikkor lenses and camera bodies that are NOT COMPATIBLE with the older equipment despite having retained the familiar F-mount.
Compatibility issues: Canon - In the late-1980's Canon switched from the "FD"
mount for manual-focus lenses to the EF mount. The FD lenses will not work on newer cameras.
The EOS, 20D, 30D and Digital Rebel can take EF-S lenses which extend deeper into the mirror chamber. They will not work on older cameras or new full frame DSLR's.
Nikon - Nikon continues with their F lens mounts used with the very first Nikon 35mm SLR camera
back in the 1950s. Nikon currently makes three series of lenses, and all will work on digital SLRs. The DX digital-
only series is designed to cover the sensor Nikon D-SLR cameras with on the APS-C sensors (all but the D3 as of Jan. 2008), but not the 35mm film format.
Nikon D-series lenses are for both film and digital cameras and have a mechanical aperture ring plus electronic
aperture control for full compatibility with older film cameras. Nikon G-series lenses cover 35mm and digital
sensor formats, but don't have the mechanical aperture control so the camera needs to have electronic aperture
capability to use this lens type.
The D40 lacks the focus motor required to drive prime (fixed focal length) lenses so that you only have manual focus if you add a fast prime lens for low light no flash work.
Pentax - The current line of Pentax digital camera lenses is called the DA series. These lenses have the same mounting
style as the Pentax K-mount lenses for 35mm cameras, but have a reduced area of coverage since Pentax DSLR
imaging sensors are smaller than 35mm film. As a result, if a DA lens is used on a Pentax 35mm camera,
there will be significant vignetting. DA lenses don't have a mechanical aperture ring, so meter coupling may be
quite limited depending on the film camera's aperture control requirements.