I knew I'd strike a chord with the Nikon lovers.
First off, the bottom line of the post was spend money on glass.
Second, the D40 is the only DSLR in the Nikon line with that sync speed, all others are 200 or 250. So there is no place to upgrade to for that one specific feature.
Third, my focus is long term. Unless your a casual "take pictures of my cat" photog, you'll inevitably upgrade everything you have at some point, unless your a trust fund baby and buy what you want when you want it.
I know so many photogs that bought Nikon DSLR's because they were cheaper and are kicking themselves for doing so. They know they should be using Canon, but since they've bought all this stuff for Nikon they can't afford to switch and lose the depreciated value. Plus, everything on a Nikon is backwards on a Canon. Zoom, focus, shutter/aperture dials, and feature terminology. If you do switch at some point it will be a real struggle.
In closing, I say all these things because I know. After talking to Nikon and Canon Reps, Canon R&D, pros in the field who use or have used both brands, and knowing tons of people that have(or want to) switch to Canon and non who have switched to Nikon, Canon picked up the ball when Nikon dropped it.
Photography and equipment is as progressive as skiing. A triple twister spread ain't winnin' no freestyle comps anymore.
PS- I used a Digital Rebel for three year and it's still going. I beat the absolute piss out of it. Shooting in heavy snow, mist, -20F to +100F, shot after shot it never let me down, but it still feels cheap.