Hi TS, I started with a SB-400 and later added the SB-800. My original intention was to sell the SB-400 after buying the SB800. After some thinking, I have decided to keep the SB-400 for several reasons. It is lightweight, compact, runs on 2 AA batteries and reasonably fast recycle time. It is great for usage indoor, e.g at home or places without high ceilings. For places with high ceilings such as the lobby of a hotel or exhibition halls, the bounce light will be rendered useless. However, I also have a Flip-it bounce reflector specially designed for SB-400. This allow me to use the flash when the ceiling is too high for bouncing off the flash light. You also need to keep in mind the limitation of the distance coverage. It works great for distance within 20 feet. Beyond that the power is quite weak. Even if you use exposure compensation, you cannot really achieve the desired lighting level for your exposure.
So there you have it...first hand experience. So long as you understand and use it within its limitations, you will find the SB-400 a useful little flash. Absolutely better than the built-in flash + many more benefits. It is in my bag all the time, together with the Flip-It reflector. If the SB-600 is out of your budget now, just go for the SB-400 first and add on later when you have the funds. Cheers!