I just traded in my 2 week old F40fd for the Nikon S500. I have been a long time Nikon fan and should have listened to my gut feeling. I just couldn't stand the muddy look Fuji gives you at 100% viewing. The F40fd was good but only if you resized down considerably.
Here is an ISO battle between the 2 cameras. Not scientific just tried to get the same lighting as best as possible. Personally, I perfer the S500 results. I just can't wait to try the S500 in the day as well.