The D70 has a focusing motor, making compatiable with all af lenses, the d40 requires AFS lenses for autofocus, which are less common and more expensive.
The D70 has a more convienent button layout and requires less menu-digging to change common options.
The D40 has a MUCH larger screen
The D40 has a larger memory buffer, allowing it to take more pictures without a pause.
The D70's battery life is forever and a day, the d40 doesn't last as long--probably due to the larger screen.
D70 uses compact flash, the d40 uses sd
Picture quality is nearly identical.
The D70 cost about $350 used, the D40 goes for about $250 used.
Overall they are both good cameras, I prefer the D70 due to it's size and button layout, and autofocus motor.
