The only complaint I have about the D40 is that its an "entry level camera" but because they removed the AF motor from the camera you can only use newer lenses that are not priced very entry level. That aside its a very easy camera to use and if you do decided to invest in say the 55-200mm VR (a best buy for the D40 when coupled withthe 18-55mm kit) or even the 18-200mm VR then you are set for lenses for awhile even if you upgrade to a sturdier more feature packed camera in the future, as long as its a Nikon your lenses will still be good.
I think you mean that you can indeed use older lenses, but those won't auto-focus.
As for the 18-200 VR, there is a limitation on the D40, which I believe will not bother most users of that camera, and that's that the D40 does not, unlike the D80, have an "A/MA" switch (auto-focus with the possibility of manual override) on the body. So you can use the 18-200 VR with the D40 in either auto-focus mode or manual focus mode, but not in "auto-focus with manual override" mode.
The D40 is a nice "beginner level" / "entry level" camera. That's what it promises and that's what it delivers.
As a beginner, I can honestly say it fits my needs. I'm learning as I go and still haven't tried most part of the available settings.
Having said that, it's quite clear Nikon offers a different product for each market niche. It's really a question of getting the camera that can give you the results you expect and/or are able to get from it, given your skills.