Bought a set last night at $749 from Challenger. The kit comes with the AF-S 18-55mm f/3.5-5.6G II lens, two 2GB SD cards, a screen protector, table-top tripod, camera bag and lens cleaning kit. Quite a good deal. You also have the option of buying the 55-200 lens at $400+, which will make it roughly the same price at the advertised $1188 at other places.
Personally, the reason I prefer the 40 over the 40x is because the flash-sync is 1/500 for D40 but only 1/200 for D40x. This is important as I do a lot of shooting outdoors.
Hope this helps.