Chris, definitely follow Steve's link and check on the TBH photographers. They share a lot of tips on what equipment they use and how they set up the shots. If Mandi wants to get into taking good action and outdoors pictures, it's a great place to hang out. As Steve said, I go by Convert over there, just look for the Lacy avatar
"If you were purchasing a new camera today, would you buy a D80 again, or would you look at a D90? D700?"
If I was buying today and money wasn't an on object, I'd buy the D300 or the D90, but only because I think I could utilize the additional features. The D300 has a ton of cool extras on it, like incredible ISO and a blazing sports mode. The video option on the D90s sounds very cool, and even though I never shoot video I bet I'd start with that camera. But there should also be some really great deals on new D80s right now. I got a really good price on my D80 from a friend that was upgrading to the D300, and so far I'm very happy with it. I'll probably wait for another big jump in technology before I upgrade again.
"Do you think that a D60 would work to get good action shots? Lastly do you think there is a point of diminishing returns on the Nikon cameras when used by an amateur, and if so which model do you think that begins with?"
I would either do the D40 or jump to the D80. I liked my D50, the precursor to the D60, but I haven't been impressed with the D60 itself. The D40, on the other hand, is a great price for a very nice piece of equipment. I think the point of diminishing return starts right away, so if you just want to learn the basics but still shoot a DSLR, the D40 is the way to go. However, if you want to spend a little more time learning how to tweak and integrate shutter speed, aperture and ISO, you'll get a lot out of a D80. You'll take fine pictures to begin with, but you have a lot of room to grow if that's what you're willing to work on it. The D90 is primarily more expensive because of the video capabilities. I haven't played with one yet, but it sounds like the usability will be similar to the D80. Going above that is probably a waste of money until you have several years of photography under your belt.
I do recommend getting a kit with two lenses to begin with. You get a discounted rate on lenses when you buy them in a package, and trust me, you'll want a couple options when it comes to animal action shots. If you buy online, look at
www.bhphotovideo.com or
www.andora.com. They have guaranteed high quality products, good customer service and very competitive pricing.