oooh what a question, generally speaking the D80 is overall the better camera. However one of these reasons is, its bigger and fits some larger handed folks better,lol, (so mearly an opinion) but im the opposite and the 400D fits my hands a lot better, so prefer it. Another + point of the 400D is its generally better handling of low light situations and better noise handling, also its a darn lot cheaper (£200 cheaper). Other than that there fairly similar, however the D80 does have a few more features, a lot more custom function features, also a top mounted LCD like the more pricy range of cameras, it is def the better overall camera (I think nikon aimed at a higher market than the 400D, going for somewhere between 400D and Nikon D200 in terms of features and price), however im still abit hmmmm about it being £200 better than the 400D, (also nikon seems to produce ever so slightly 'softer images'),D80 at £700... thats into canon 30D price range, and the 30D is better than Nikon D80......Iv handled and used both the 350D and Nikon D80, D80 was better, but to big for my taste, ill be getting my 400D in a couple of days so will write up a proper comparison for you if you like,
Another point is 400D with a good £200+ lens will floor a D80 with its kit lens, so you would get a 'better' overall cam/picture quality for the same money, but then of course you could buy a D80 and a good £200 lens which in turn would produce a better image, but as said your talking silly money then and you would better off going to the more semi pro camera route
Basically you would place these as enthusiast cams (in order of how 'good' they are, 'worst' 1st):
D70
350D
high end enthus......
400D
D80
Semi Pro
Nikon D200
Canon 30D
Pro
Canon 5D
L33T Pro Silly money
Canon EOS 1D Mk II
Canon EOS 1d Mk III
etc
All are obviously highly capable cameras and all will easly give amazing results