No, it doesn't.
It may have a limited own label range of glass atm with some serious overlap in some areas & holes in others but there are some very nice (albeit some are overpriced) lenses in the line up especially if you factor in Minolta lenses & Sigma/Tamron etc. e.g. I think that any brand would be happy to have the 16-80mm ZA on their bodies & the 18-250mm seems to be a very nice lens for it's role as a mid-range walkabout.
& then there are new lenses to come from Sony - they are talking about a 54 lens range in 2009 which should cover most people except those needing fairly exotic ones.
As for Dpreview's A700 review there are some distinct anomalies:
I can't see how they reckon that the A700 is a full 1.0 down on build quality compared to the 40D - I would put them as even or possibly even slight advantage to the A700.
& they compared the best jpeg output from the Canon & Nikon to the 2nd best from the Sony?

No mention of wireless flash etc. etc.
Having just gone all through this with the 40D, A700, D300 & E3 my A700 arrived today (a bit earlier than I originally expected to get 1 but Sony have a £150/$300 cashback on atm in the UK).
They are all nice & no doubt capable of taking better pictures than the photographer but imo:
there is actually very little IQ difference between the 4 of them at least in the regimes that I shoot in.
1st to be discounted was the E-3 - great build but not really struck on IQ & lens availability isn't great.
They do have a few stunning lenses though albeit at stunning prices too.
D300 got discounted on price/vfm - no doubt it's the best overall body but it's also the dearest by far & what extras it brings I don't really need.
So, A700 v40D:
price was neither here nor there
imo the A700 ergonomics/ease of use (albeit some of it is no doubt due my Minolta background so it's largey familar but then that's why I also went Minolta XD 25 years ago instead of Canon A1) is far better (yes, I did go to a store & try them all) & the camera just feels nice to my hand.
I like in-body IS
The fact that I already have an extensive lens collection obviously didn't hurt but it didn't really come into it either as with the second hand market as it is I probably would have actually come out with a profit if I sold my MAF fit lenses.