I've got a D70 but probably would have bought the D40 if it had been
available 2 years ago. I wanted the image quality of an SLR and I use
only the 18-70 kit lens and an old manual 200 f/4 that a friend gave to
me.  I don't use any fancy settings, just put in aperture priority and
occasionally switch it to centre spot metering but I don't both with RAW
or bracketing or other fancy functions.

A cheaper body would mean I could afford to buy an 80-200 2.8 but the
camera and memory has already set me back $2k and I can't really justify
spending more on it.