I would not buy the D40 or any of the other Nikon bodies that don't have the internal focusing screw drive. Reason being is that there is some very nice older Nikon glass out there that can be found used for cheap that will work fine with any of the newer Nikons that do have the screw drive. For example, I bought a 50 mm f1.8 off Ebay for $50, a 24-120 (older, non VR version) for $180 at a camera shop, and an 18-35 brand new on clearance for $400. None of those are AF-S lenses so the autofocus wouldn't work with a D40 or D60. On the other hand, any Nikon lens, including the new AF-S lenses and the old manual stuff will work on a D80.
Think of a camera like buying skis. You can buy cheaper, skinnier skis, and they'll get the job done in many situations, but once you get really good at skiing and want to challenge yourself in deep pow and/or steep terrain, you're going to want those higher priced fatties. Makes sense to just buy the good stuff up front so you're not paying for it twice.
I got my D200 in like-new condition with less than 5000 shutter actuations off Ebay for $800 a little over a year ago and it even came with three batteries.
A quick search on Ebay reveals D80s with buy-it-now prices of $600. That's not much more than a brand-new D40 and you can use your current glass. Since the D80 has been discontinued in favor of the D90, shop around, I bet you can find a screaming deal on one if you're patient.
...Some will fall in love with life and drink it from a fountain that is pouring like an avalanche coming down the mountain...
"I enjoy skinny skiing, bullfights on acid..." - Lacy Underalls
The problems we face will not be solved by the minds that created them.
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