The good Excellent feel and compact size; very customizable menu architecture; nice guidance for dSLR newbies; excellent noise characteristics for high-ISO shots.
The bad Slow kit lens; occasionally slow to focus; only 6 megapixels; raw editing software costs extra; control scheme can be awkward; no automatic sensor cleaning.
The bottom line The Nikon D40 is a great transition camera for going from point-and-shoot to your first dSLR.