Silenus, Great photo, and good post too. The D40 has an amazing capacity for great pictures that did not get diluted because of newer versions.
OP, it would still make sense to buy the D40 as a kit with the lens, even for around $300; that is lower than the purchase price of many a PnS that function sub-par to it; and while newer DSLRs might have more power, you will end up paying at least $500 for the D3100 at the lowest end. Save yourself that $200, use the D40 till you are ready to upgrade to a much more powerful camera. If that takes a year or two, I can assure you the D40 will be fun to use all that while.