It's a really tight budget but it should be doable provided expectations don't run too high. I doubt you will find anybody other than Gordon on this site (prove me wrong someone, please) who has personal experience of both the D40 and 350D. As I think you know, Gordon reviewed the 350D here
and the D40 here
. I also suggest that you use the forum's Search
facility searching for posts including D40 and for posts including 350D. It will take some effort to discover posts relevant to your question but you may be able to discover strengths and weaknesses even though the value for money question won't be directly answered.
Which zoom lens to choose? I have no experience of any of the lenses within your budget but I have had a look on a some of my favourite review sites. As others have pointed out, if you can share your own zoom lens for a while that eases the short term problem. It means your friend has to choose the 350D of course, but if there is any
chance that your friend may be able to do a little moonlighting to earn a little extra towards that zoom then it would be a shame to cut out that option by choosing the D40 even if (as it probably is) it is roughly the same value for money as the 350D.
Assuming that a zoom has to be purchased within that €170 budget then have a look at the Tamron 70-300mm f/4-5.6 Di LD Macro 1:2 AF. It is reviewed here
on a Canon 20D at SLRGear and here
on a Pentax at Photozone. This lens is available for both Nikon and Canon mounts. There are other possibilities out there (Canon, Nikkor, Tamron and Sigma) so I am not suggesting that the Tamron is your only
option. Both SLRGear and Photozone carry reviews of the Canon EF 55-200mm f/4.5-5.6 USM II and Nikkor AF-S 55-200mm f/4-5.6 G ED DX.
One issue you need to watch if considering the Nikon D40 is that the body doesn't have the auto-focus motor that some lenses without their own internal motor require. This shouldn't be a deal breaker but you do need to be aware of this. The EOS 350D doesn't have this problem as AF lenses for Canon cameras have their own motors built in.
Finally, most forum members would recommend that your friend actually holds both cameras in the store if at all possible. There is no point in choosing a camera which doesn't feel right and the D40 and 350D are probably not so different in the value for money stakes that this step should be ignored.