I bought the 40D as a replacement for my 400d and the difference is unbelievable.
One of the key features I was after was a better handling of high ISO images as my cameras are use a lot for weddings. Dimly lit churches can be very problematic but the high ISO performance of the 40D take them in its stride. One of the other key features I wanted in this camera was its high frame rate of 6.5 fps. This is pretty damn quick and is a huge improvement over the 3fps frame rates of most entry level DSLR's.
The camera is essentially from Canon's mid or 'prosumer' range and as such is chunkier than entry level cameras and is better built. The shutter is also rated for 100,000 actuations, twice that of entry level models. The camera is made to be a dependable workhorse. The features list is extensive; 10.1 million pixels, 6.5 fps, EF-S mount, Self cleaning sensor and live view being the key ones. Custom functions abound and the camera features three custom settings on the mode dial which is pretty handy for oft-used settings.
The image quality of this camera is astounding for the price. I think it rivals my 5D in quality and frankly eliminates my 400D. At high ISO's such as 1600 the camera produces very usable shots. Only at the expanded ISO setting of 3200 does grain and noise become a little distracting and even then, at smaller sizes the photos would still be usable.
Possibly some folks reading this are thinking about the 50D as indeed I was. Here's how I made my choice: High ISO performance was critical and after reading some of the reviews on respected sites it appeared that the 50D was marginally worse at high ISO's than the 40D due to higher pixel density on the sensor. There's probably not much in it but then I thought what's the point of paying a £300+ premium for a camera that can't match the old one in my key area of concern. I would love the higher res screen of the 50D but have got this far without one - again, is it worth £300 more?
To keep sales of the 40D high Canon are offering £60 cashback until Feb 2009. That means you can pick up a body only for barely over £500 after the rebate. This is a virtual giveaway.
In use the camera feels great and has a nice large viewfinder, the only negative I have is that the buttons on the back of camera are labelled on the 'wrong' side for my taste leading me to keep pressing the wrong one. I'm used to buttons being labelled on the left but these are labelled on the right. Minor niggle. The high speed continuous mode is fantastic and the camera can handle around 17 images (about 3 seconds worth) of continuous shooting in RAW before the buffer fills up. Start shooting JPEGS and these numbers get quite silly. Even at high quality in JPEG mode you could probably hold down the shutter for 10 seconds straight before the buffer filled up! This is a viable option for sports or wildlife photographers. The 3 inch screen is bright and clear and being what I'm used to I won't be pining for the high res version. Live view is handy too - especially if you can't really get your eye to the viewfinder such as when the camera is really low.
The camera has breathed new life into my EF-S lenses like my 60mm macro. The camera can extract even more detailed images from it than my 400D and that, under the right conditions, was no slouch.
The 40D also utilises 14 bit processing. Most cameras before it use 12 bit. What this means is that more subtle variations of colour and tone can be achieved as each pixel can have any one of 16,384 values for each red, blue and green element and opposed to 4096 values in the 12 bit method. This should lead to less colour banding in images - especially when pushing them a bit more in photoshop.
So all in all this is an excellent camera. It's a worthy companion to my 5D for weddings that exceeds even that camera's fantastic capabilities in some regards. I would happily have another 40D body and take three cameras to my wedding shoots! At around £520-530 after the rebate they're a bargain. At this price you could pick up the camera and say the 50mm F1.8 lens for less than £600. That's putting this seriously capable camera in reach of some folks looking for entry level gear. This is no entry level camera though - it's a serious piece of kit.