Dan and Omers,
yeah, I knew about the K-m before but I'd just got the K20D and couldn't bring myself to part with it (which I'd have to do to justify the K-m) as it's one of my favourite cameras to use. In fact, of the cameras I've owned it's probably only bettered in terms of pleasure of use by the 1D and 1Ds. The results are very good too.
So yes, I know what I am giving up switching to the K-m. I've never used a camera without a secondary (primary?) LCD, but I have owned an EOS 350D which has it on the back and I got used to it. I'm generally pretty adaptable as long as I can get the result I want, so things like that (and lack of optical VF on compacts) bother me less than some staunch traditionalists.
I also used to own the K200D which I think has the same VF, so I know what to expect in that respect. Omers, I'm curious about what you said about speedier focus though. Was that relative to a K20D?
So basically, for most people I think the K20D is a far better camera but in my particular case the K-m really is an upgrade. I don't currently have a small DSLR even though that was my whole reason for buying into Pentax to begin with (with a *ist DS and pancakes). The fact that I ended up with a K20D is a testament to how nice a camera it really is. But at the end of the day, my main system is EOS: 5D, 40D and far, far too much EF glass. From Pentax I'm just looking for something small to put on the back of my Pentax pancakes and FA Limiteds - to make an everyday/light travel kit.
I did consider selling the 40D instead of the K20D as I prefer the K20D but it doesn't make sense given the EF lenses I have, and the fact that between the 5D and 40D I have much more flexibility than I would with a K20D and K-m. Obviously ideally I'd keep the K20D and add a K-m but even I find it hard to justify that.
My K-m should have arrived by the time I get home tonight. Anyone want a lightly used K20D?
finally, back on topic: Alex, if your alternative is a P&S/bridge camera then I think *any* SLR is going to be nice enough that you're going to want to pinch it off her. Worth considering size as I think the Alpha 200 is a fair bit bigger than a D40.