Nikon d60 or olympus e-420?  

The Olympus SLRs are current technology, small and light and well made. The Nikon D60 is a CCD camera and overpriced - not up to the standard of the generally fine cameras Nikon is renowned for.

The downside for the Olympus cameras is the menu system, many people say it is hard to navigate...but for all basic shooting, it is a great system and you will learn to use the menus at your own pace. I would go for the e-520.

If you would like another option, the Sony A200 can be had with 2 lenses for about $50 more than the Nikon with one kit lens, and it is a better camera (Sony make the sensors for Nikons more advanced cameras) or you could look at a Pentax K200 with better specs than the Nikon at $100 less. The Pentax is a bit heavier and bulkier, but built like a tank: you will never break it no matter where you take it on holidays!

If you really want a Nikon, either move up to the D80 or get a D40 and spend the money you sane on a better lens. Which reminds me: the D60 does not have image stabilization or vibration reduction: that is in the lens; Minolta and Sony have it built into the camera, which means ALL lenses get the benefit of steadier shooting.

I own 3 DSLRs and they are all Nikons! I have had great experiences with Nikons and couldn't be more satisfied. Nikon and Canons are pretty much the leaders in the DSLR markets. In fact, I've even been hired for jobs that will ONLY hire photographers that shoot with either Nikon or Canon. So if you plan on pursuing a career as a professional photographer, that is something to think about. But if you're just a hobbyist, then that shouldn't be a problem!