^What they said. It's all about the photographer. Search around flickr and you will see some amazing shots taken by the D40.
I have a D40 as well with the kit lens and a 55-200mm VR. I'm content for now, I don't have any pro standards which I need to meet, so the D40 + Photoshop does the job.
Eventually I want to pick up a Tokina 10-17mm Fisheye.