What is a good all around purpose lens? I have a D40 with a kit lens (18-55mm) coming, but I have heard that the kit lens is very cheap glass. I was thinking of getting a 50mm f/1.8. Is this a good lens? What else would you recommend in the $100-200 range?
The kit lens
is cheap, but that doesn't mean it's no good. All of the photos I posted in
this thread were taken with the Nikon 18-55 kit lens. I even compared it to my $1200 17-55 f/2.8 pro lens, and stopped down during daylight shooting at an aperture of f/8 they were identical, which is why I laugh when people post the great photos they took during the day with their 17-55 lenses. It's no different from the kit lens shooting like that!

The slightly more expensive 18-55VR kit lens equals the 17-55 f/2.8 at night as well. The vibration reduction is just good enough that it will equal the f/2.8 speed for night time city walkaround shooting too. I use my 17-55 for other things so I wouldn't sell it, but the 18-55's are perfectly good lenses for most uses.
The $100 50/1.8 is a great 2nd lens, although you'll have to manually focus. As long as you're not trying to track a randomly moving object like my 14 mo old daughter, it's not as big of a deal as you might think. Just move the focus ring and watch for the focus confirmation dot in the lower left of the finder. To make things easier, stop the lens down a little to f/2.8 or smaller (higher f/number) for a little more depth of field. You don't need to be shooting wide open at f/1.8 to enjoy the benefits of prime lenses like these. They're unbelievably sharp, and have great color and contrast which has nothing to do with lens aperture.
Two photos from 50mm prime lenses
taken with my D40.
50mm f/1.8D @ f/2.8, 1/60s, and iso400
See how the background is nicely out of focus here? That's what you get with the larger aperture lenses (smaller f/number) since they have tighter depth of field at the focus plane. And my daughter was gyrating back and forth there, yet I still managed to get a few photos where she was perfectly in focus.
Next one:
50mm f/1.4D @ f/1.4, 1/25s, iso1600
Almost complete darkness. This is the more expensive 50mm, but at f/1.4 it has
sixteen times more light gathering ability than the 18-55 does, which is only f/5.6 at the long end. I couldn't have pulled this shot off without a fast prime. Otherwise I would have needed a flash or more lighting in the room, both of which would have ruined the natural 'sleeping beauty' dreamy look.
It's also great for landscape type photos.
f/6.3 on my D80 with autofocus support, although I really didn't need it here either
The color and contrast here is amazing. I tried some similar photos with my kit lens and it just didn't compare. The kit lens is great from about 35mm on back, but it does seem to lose a lot of color and contrast at the long end. Doesn't mean it's no good though. It's just not the best. You can still take plenty of great photos with them.