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The 40D is a great camera. Like others have said, if you have the money then get the 7D; otherwise the 40D is fine. If I don't already have a 5D I would have gotten either the 40D, 50D or sprung for the 7D (it's still a bit too much right now since it's new and everyone wants one).
FWIW, the 7D might be too much if you don't need all the features. That's the beauty of marketing: shows you all the features to make you want it even though you probably won't use/need all of them. Shoot I know it's got me hooked, that's for sure.
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