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How can I tell whether I'm going up or stepping down in model quality based on the model of camera I'm considering? With the more recent consumer Nikons, this is relatively simple because "Bigger number equals better camera" — but with their professional lines that is not the case. Canon has even crazier modeling schemes, e.g. "Mark II". Both manufacturers seem to use crazy random numbers to describe their cameras.
Is there an "answer key" to the various makers' model lines?
Generally, no. There's not a magic answer key out there. It gets a little easier once you realize they have a few lines of cameras and can distinguish between the lines - but these get a bit blurred when they change something enough that they introduce a new line. A lot of the models you see are successors to previous generations - if you limit your searches to only current models, its a bit saner.
Part of it is because one camera may be better at one thing and worse at another. The Canon 7D is supposed to have great autofocus tracking but poorer image quality than their 5D mkII - which is more important depends on what you want. On the D7000 vs the D5100 - the D7000 is certainly a better camera, but the image quality between the two is probably pretty minimal. You're paying for better usability and better build, but the model number itself doesn't really indicate whether that's an important criteria to you.
One of the main things in my answer above is that just because a camera may appear technically better in many areas, it may be a tradeoff in others and that may be the important piece to you. You can't judge pretty much anything strictly based on model numbers.
Canon's lineup is as clear as mud to a newcomer, and I believe it's because they've been working to broaden their product lineup over the years.
In days gone by, they had an entry-level Rebel camera (300D, 350D, etc.), a pro-sumer camera (10D, 20D, etc.), and a pro camera (1D). The 5D was sort of a new "slot" between their pro pro-sumer cameras that effectively split the pro-sumer segment into crop-sensor and full-frame segments.
They've now done the same type of thing with the Rebels up through the 7D. As the Rebel started to move upscale (450D, 500D, etc.), they had an entry-level "hole" in their product line -- hence, the 1000D / Rebel XS. At the same time, the 7D came out as the crop-sensor flagship, but it's kind of sitting right where a lot of people expected the 60D to be, prior to its introduction. In other words, if you kept improving the x0D line, the 60D should have turned out a lot like the 7D. Instead, Canon tried to split the difference between the 550D and the 7D with the 60D and then upgraded the 550D to the 600D.
Confused yet? 'Cause I think a lot of people are. That's a really large number of concurrent products, and there are spots in the lineup where there's not a huge jump from one to the next. The only sense I can make of it is that they sort of push the low end of the line to mass retailers, so the full product line is usually only seen in camera shops where (hopefully) there's someone there to explain the differences.
Personally, I agree that they've got one or two more cameras in their lineup than they really need, but I'm sure they've got rooms full of marketing MBA's working on this all the time, so I'll trust they've given it lots of thought.
As for getting a sense of the the whole DSLR line of a manufacturer, Wikipedia has timeline charts for each of the manufacturers, showing the entire camera lineups over time. Unfortunately, as rfusca points out, this doesn't tell you very much, just general trends.
If you want to compare two cameras, you either need to use both of them or trust reviews. I personally like DPReview: they've reviewed a lot of cameras over the years, which leads to consistency; they will usually compare a camera to its close competitors (at least within the same brand, e.g. they compared the D7000 to the D90 and the D300s); and they go into excruciating detail about the handling and operation, including sticky points. (I only wish they had reviewed more lenses.)
There's no way to say, across the board, how any two model numbers compare.
For Canon DSLRs, the trend is generally that 1-digit models are their pro line, 2-digit numbers are their prosumer line, and 3-digit numbers are consumer lines. Then within those lines, there are different "rules". For the 3-digit (consumer) cameras, larger numbers mean newer cameras. A 350D is older than a 450D, etc. Within their professional line, however, the smaller number usually means a "nicer" camera, but has nothing to do with the age of the camera. A 1D is "nicer" (more expensive) than a 5D, but the 1D mark II is newer than the 1D mark I, and the 5D mark II is newer than the 5D mark I.
Nikon does some similar number games, but I'm not as familiar with their camera lines... and for compact cameras, things just get more complicated, for any brand, I think.
Nikons don't appear to be as bad as the Canons:
The trailing letters differentiate between features on a model (e.g. D70 vs D70s is a step up in LCD screen size). The method to the madness is most likely related to the order these were released (starting with the big advanced cameras, then they started coming out with prosumer models that had smaller sensors, then they added a bunch of features and released the semi-pro line, and finally they started cutting features for cheaper consumer).
Within each range, higher numbers are typically better. However, comparing between ranges is difficult. Sensor sizes and resolutions will vary, and features are all over the place. Newer consumer cameras include movie capabilities, professional models design the sensor to last longer, shot faster, and include things like a cable remote as opposed to the wireless remote or a GPS connection.
If you go with Nikon, start by deciding how serious you are to pick your line, and then decide how many features you want/need for the price they cost.
Edit: As rfusca points out, with the D60/D90, Nikon appears to have run out of numbers to add for their prosumer line (I guess they don't like the sound of D95). So you are left with cameras like the very high end D7000 (smaller sensor than the D700, but otherwise holds it's own against the 3 digit line), the D5100 in the middle, and the D3100 for the general consumer.
Note that you really don't want to compare a camera made in 2000 with one made in 2010 by model number, the technology is moving too fast. These rules of thumb only help out when doing a quick scan of cameras released within a few years of each other.
