With the D40, Nikon is finally competing price-wise in the entry-level DSLR market. In the USA, the D40 is sold with the kit-lens only for $599 USD. In Canada, the camera is available alone for $649 CDN, with 18-55mm F3.5-5.6 lens for $749 CDN or with the 18-135 F3.5-5.6 for $999 CDN.

Compared to other entry-level DSLR cameras, the Nikon D40 performs generally well. It is particularly fast and responsive, with excellent focus-speed, short shutter-lag and unlimited continuous drive. Image quality is slightly below average, with little image noise but occasional moire and strongly over-saturated colors. Noise starts very low, increases slowly from ISO 800 and becomes disturbing in shadow areas at ISO 1600. With an adequate lens, image sharpness is excellent. Under artificial light, the automatic white-balance performs poorly, just like most other DSLR cameras.

The Nikon D40 is mostly lacking in terms of features. There is no depth-of-field preview, no bracketing feature and no support for a large number of Nikon lenses. Particularly, the lack of focus motor inside the camera currently precludes the use of most prime lenses.

Overall, the D40 is a limited DSLR which produces images of reasonable quality for its price. However, the Pentax K100D produces better images (no moire problems and greater color accuracy), is more full-featured, costs less and conveniently uses AA batteries. It also supports a much greater legacy of lenses and provides them all with stabilization thanks to a built-in mechanism. Together, these two characteristics contribute to making the Pentax K100D a much better value than the D40. For an even lower cost DSLR, the Pentax K110D which is identical to the K100D except for stabilization also provides better value than the D40.