Well there is no easy answer to that question. It’s a bit like asking is a BMW better than a Mercedes? Or are Macs better than PCs? Even if I would answer yes to both of these questions it’s really just a question of taste. The two companies have been around for a very long time (1959 Nikon & 1961 Canon) and are extremely competitive. If someone tries to sell you one over the other it’s most likely because he or she will make a better margin or simply because he or she doesn’t have the competing DSLR.
From one year to another they tend to have an edge over the other depending on their latest release. But every time they launch a new product you can be sure that the competitor has an alternative that will be available soon. These cycles used to take 4 to 5 years but like everything it has accelerate and now a competitor usually answers to a new product within a year or two.
So how do people chose? Often is because someone close to them (family or friend) uses one brand over the other. And that is not a bad call because this will give you support if you have questions on your new DSLR. I for example use Canon because my father uses Canon and as a result I could borrow lenses from him that I couldn’t afford when I started playing with photography. And since then I stayed with the brand.
Talking with many many photographers here are two conclusions that come out often: First, Canon seem to give better results when used for outdoor photography (Nature, landscapes, sports, etc…) and Nikon for indoor photography (Clubs, Dinner, Studio, etc…). Since I heard that a couple of times I have always paid attention and it appears that indeed a majority of sport photographers for example use Canon and their very distinct white tele-objectives whereas most photographers in night-cubs have Nikons. A second conclusion that I have heard often is that Canon optics are a bit better (wider ranger and stronger build) where the camera body of Nikons are slightly more sophisticated (more features and functions. Editing for example).
In terms of compatibility Nikon lenses can be mounted with almost all SLR & DSLR from the brand since 1959 but you may run into problems with the AF (Autofocus). Some lenses still sold today with old AF technology will not work with recent Nikon bodies. Canon on the other hand came up with a new socket for its lenses when it launched its new AF system and the EOS series in 1987. As a result any Canon lenses or camera bodies from 1987 onwards will work with each other. Also note that Canon cameras can use Nikon lenses (with an adaptor like this one for example: Novoflex Adaptor), but Nikon cameras can’t use Canon lenses.
The second conclusion, on optics, is the one that comforted me in my choice to invest in Canon material. For me optics are the most important part of your photo equipment. Photography is all about light and a better lens will bring more light to your camera body / sensor. It does not make any sense to have a very expensive full frame body with very high resolutions if you use it with low quality lenses. Not enough light will make it to use the full capability of the body’s sensor. But you will always gain from using high quality lenses on mid range camera bodies / sensors.
Also optics do not evolve much simply because producers have reach the limits of the laws of physics within reasonable production costs. In other words if we wanted to produce lenses that would handle more light it would be extremely expensive if at all possible? The top rang lenses from Canon or Nikon usually change every five year or more and the only evolutions are for the AF (autofocus) or the IS (Image Stabilizer). On the other hand camera bodies are constantly evolving and being upgraded. Therefore I would always recommend to invest more in lenses than in camera bodies. With a good lens and a decent body and good photographer will be able to produce amazing images because let’s not forget that at the end of the day what will really make a good photo is the eye behind the camera.