Upgrade? that would make the assumption that its beneficial to move from Nikon to Canon:news:
You could get a Nikon D300 or 300s, the excellent 300/4 AF-S and a 1.4tc which gives more variation than the fixed 400usm, slightly longer focal length and you get to have a spare body that'll still be useful??
There both equal paths in my opinion, both offer the same benefits, but don't discount the other options
Steve, come back to the safety of the Nikon Forum!
Actually i'm afraid that I am rapidly coming to the same conclusion as Chuckoo-shrike, and have decided not to buy any more gear for my Nikon because I'm gonna sell up and defect to Canon.
I currently use the Nikon 300mm f4 AF-S, and it is a very nice lens, and the results with the 1.4 TC are still super sharp, but I'm afraid that I find the (relatively marginal) slow down in AF speed when using the TC to be a problem for the bird photography I do (especially fast-moving warblers). Using a "naked" lens is always going to be faster than a TC combo, and the canon 400mm f5.6 is, by all accounts very fast.
Also, you say that the relative focal length on Nikon's 300 + 1.4 TC is a little longer. Well yes it gives you a 420mm lens...BUT on a cropped sensor Nikon, the crop is only 1.5x, where as on a Canon 50D it is 1.6x...so the Nikon gives you an effective 630mm lens, but the Canon gives you a 640mm lens....and you still have the option of adding a Canon 1.4 TC for longer work, and even a canon 2x TC (my understanding is that whilst Canon's 2x TC isn't perfect, it is a heck of a lot better than Nikon's...but I might be wrong on that??).
Finally, if I was in the market for a 300mm f4 and was choosing between Nikon and Canon, Canon would win - their lens in this category has an image stabiliser (which the Nikon lacks) and is a $100 cheaper (in the US at least).
I love my Nikon, but I'll be moving over to Canon in due course.
Dave