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Realize that you're going down a slippery slope. One downside to the D40 is no image stablization in the body - you have to buy a more expensive lens. IS doesn't help in low light with moving subjects, but it can make a big different in low light with static objects.
You might want to take a look at the Canon G10. It likely has better shutter response than your current p&s, and has decent zoom range. For dSLR, upgraditis is strong, and you can soon be well north of 4 figures for a setup. That being said you can also look at Olympus (e-420) or even the new Panasonic G1. Those are a different sensor size though, and there are advantages (smaller) and disadvantages (not as much market penetration). It is hard to go wrong with a D40 though - good basic camera. Just don't start messing around with the higher priced ones, because once you do the D40 will look like a toy.
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