So what do the cameras in the next price-tier have that the Nikon D3100 doesn't? A lot of stuff that most people looking in this price range won't be concerned with. Here's a list of the "missing" things and/or "problems" with the D3100 as I found while researching my purchase:
1) Most online reviews and forums mention a problem with AutoISO and the built-in flash. When using the built-in flash in full auto, AutoISO jumps straight to the maximum ISO value, which I believe is defaulted to ISO-3200. Nikon says this is intended to get a better exposed background, fine with me. Personally, I think that ISO-3200 images out of this camera are very useable unless you're pixel peeping. If you just want to blow up an indoor portrait to an 8x10 (or even larger, I don't know!), you won't have a problem. Don't worry about it!
2) You can frequently hear the lens auto-focusing in your videos. Ok, you got me. If you're in a silent environment, yes, you will hear the autofocus motor, but if you're recording kids laughing and having a good time at the local indoor waterpark or at a parade or something, it's not loud enough where it would be a bother. If it is an annoyance, you can still shoot video with manual focus.
3) No external mic input. The D3100 is sufficient for getting a clip when you want it, you're not going to have movie quality sound. Who carries an external mic with them on vacation? If you're buying a DSLR specifically for video capabilities, you probably should be considering a dedicated camcorder anyway. For my purposes, there's nothing wrong with mono sound.
4) Lack of bracketing -- too much to explain in a review. Google it and see if you would ever use it. I can see why it would be useful, but I doubt it'd be useful for on-the-go photography.
5) Manual settings buried in menus instead of having dedicated buttons -- Most people at the entry-level probably aren't shooting full manual. The D3100 features several "scene" modes that you can use, otherwise there's always aperture or shutter priority, or even full auto. Depending on which priority you're in, the scroll wheel on the back will adjust the aperture or shutter speed. If you shoot full manual all the time, you may want dedicated buttons, meaning you should look elsewhere. If you're not in full manual, I can't see this being a problem.
6) Lack of built-in flash commander mode -- you can't trigger an off camera flash using your built-in flash. Some DSLR's have built-in flashes with this capability, the D3100 does not. For travel photography, this isn't an issue. For most at-home photography, this isn't an issue. It could be for macro photography depending how close to your subject you are, or if you have a full studio with multiple flashes setup in your basement. If you decide at a later point you want this capability, some external flashes such as the Nikon SB-700 can function as a commander. Otherwise, you can use whatever external flash you wish in conjunction with the SC-28 or SC-29 cord inthe D3100's hotshoe.
7) Perhaps the biggest potential problem with the D3100 is the lack of a built in focusing motor. This means the D3100 will not autofocus with plain AF lenses (manual still works though). Any lenses with the AF-S designation will auto-focus just fine. This can be costly though - on some of the higher-end lenses, the difference can be $600 or more between the AF and AF-S version of the same lens. Again, this comes down to "what will you use it for?" For this, I go back here: If this is a problem, you shouldn't be looking at an entry level DSLR anyway.
Nikon ships the D3100 with the 18-55mm AF-S VR lens, offers a very affordable 55-200mm AF-S VR telephoto, and my personal favorite, the 35mm f/1.8 AF-S lens. The 55-200 can be had for under $100 if you catch a sale or rebate, and the 35mm can be had for under $200. These three lenses will cover most of the needs for entry-level photographers, and all three of them auto-focus on the D3100. By the time we as amateur photographers outgrow this setup, we will know specifically what focal lengths we primarily use in order to make a more educated purchase for the expensive lenses later on. And I'm convinced, when that time comes, you'll have your eye on the latest and greatest prosumer DSLR to go with your fancy new lens anyway.
Until then, enjoy the D3100 for what it is. A great, inexpensive, entry-level DSLR, which, in my opinion, produces excellent images when in the hands of a photographer ready to learn!