K20D is a decent camera, though hardly the only digital camera on the market. 90% of the image quality isn't in the camera body to begin with -- it's in the lens.
If money is an issue (and hey...for most people, it's an issue), get a cheaper body -- the Pentax K20D body retails for about $1000 here, whereas a Canon Rebel XSi body retails for $680. The lens costs more on top of that...but at least, with the cheaper body, you have a bit more money to throw at a better lens.
Remember, also, that HDR work doesn't just come from the camera. You need software for it, like Photomatix. And you also need something like Photoshop for additional post-processing and cleanup -- HDR tends to inflict a fair bit of degradation on the image, at least initially.
There are open-source alternatives to these programs, of course, although in my experience they just don't work as well.
Yeah, Photomatix is probably the best out there for HDR software -- just watch out, because the digital noise in an HDR can be fierce (expect a 2-stop noise increase e.g. an HDR made from three ISO 100 photos will have ISO 400 noise).
PAINFUL.
And again, if money is tight, then save on the body and put as much money as you can into a good lens. Actually, just do that anyhow. If there's some feature on the 40D or K20D that you absolutely have to have, get the 40D or the K20D...but if not, get a cheaper body, and put the savings toward a better lens. The lens is, after all, where most of the image quality and sharpness comes from.
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