Noise reduction Nikon D60/D40

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With these cameras there is a option for noise reduction that is defaulted as “on”. I believe this is purely done in software within the camera is this correct? As these are relatively basic cameras is there any software available that does it better than what is provided in built in there cameras? What I am thinking is my PC is far more powerful than what is built in to the camera so there must a program I can use on the PC to do the noise reduction better than the camera can. But all the programs I have found just look to be really quite basic mostly looking like there simply a anti aliasing program. Are there any available that do the job better?

Thanks
 
What settings do you use on the camera? Reason being is that if you shoot in RAW even if you have noise reduction turned on it wont do anything to the RAW file.

There are a LOT of noise reduction programs and most if not all of them will be a lot better than the built in noise reduction, you have to think that the camera has a very small processor compared to your computer.

Noiseninja is one of my favourites but there are many others as well.
 
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