I assume you do know that the Nikon D40 does not have a video capability. None of the DSLR cameras do.
So your comparison is apples and oranges.
I have a camcorder and a DSLR camera (and small digital cameras).
I use them for different reasons.
I have, on occasion, carried and used all.
With the software that is available now, you can produce a DVD that contains both elements (slides and video clips).
If you are asking if you should buy a still camera or a camcorder,
that would depend upon what interests you more.
This post is a sort of double post because it regards both camcorders and digital SLRs.
I have done research about these products so I am not asking about there technical capabilities. I am asking about practical use.
For family shooting, point and shooting etc what would you rather use: the camcorder or the dSLR?
This questions does sound a bit stupid but I am asking this because I can get both the products for about $620. Same price.
What would you prefer to use.