I upgraded to a 40D last weekend, picked up one at Circuit City with the 28-135 lens kit. I just sold the lens, making the camera only cost $600...not too bad for a brand new 40D! 
I had to hold off until now to make this post. I've been around here long enough to know you don't make a "Look what I got" kind of post without having some duck photos ready! So with out further delay...
Both taken with my 40D & 300 f/4L
I'm absolutly in love with the 40D, just holding it my hands it feels like so much more of a camera than my 350D. It's a lot more balanced with the 300 f/4L attached than the 350D.
I'd have to say so far my favorite feature is the C1, C2, & C3 custom user settings on the mail dial that you can program. One click of the wheel and I can go from shooting macro photos to birds in flight! My 40D and I have bright future ahead of us
