I've compared my 18-55VR to my pro Nikkor 17-55 f/2.8 and stopped down at f/8 during daylight shooting, the cheap little 18-55 lens actually looked sharper! No kidding. I had myself tricked viewing both images at 100% on my 24" iMac simultaneously, but the sharper shot was actually the 18-55! The only difference I saw was in the far corners. You almost couldn't tell, but the 18-55 seemed to be a tad sharper in the corners, but otherwise they were identical. The reason you spend 5 or 6 times more for the Nikkor 17-55 f/2.8 over one of the $100-200 18-55 variants is for shots like this:
D40, 17-55DX @ 55mm & f/2.8
That's the long end of the lens and at maximum aperture. Typically lenses will be at their weakest from an image quality and sharpness perspective at their long ends and maximum aperture, but the pro lens still looks sharp and has great color and contrast. Next, see the light points in the background? That's the out of focus rendering of the lens, or "bokeh". Cheaper lenses and even some expensive ones might have sharp edges on the bokeh with the outer edge actually being brighter which will quickly ruin portraits like this if you have a bunch of bright ring-shaped light rather than smooth solid circles. What you see there is more neutral looking bokeh. It's not the best, but far better than the cheaper lenses. The larger f/2.8 aperture is also 4 times more sensitive to light than the 18-55 would be at 55mm and its maximum aperture of f/2.8. With more light gathering ability, that gives you more range for your flash, or it allows you to let more natural light into your photo such that you're depending on the flash less. Or if you're trying to stop the motion of a 1 yr old without a flash, the f/2.8 aperture will give you 4 times the shutter speed of the 18-55 at f/5.6 at its long end, and still nearly twice as quick at the wide end too.
Next, depth of field.
38mm and f/2.8
See how the deck, bench, and grass are all nicely out of focus? Larger apertures mean a shorter depth of field, and give you the ability to isolate your subject better which makes for a better portrait. The variable maximum aperture of the 18-55 f/3.5-5.6 lens would be about f/4.8 or f/5 at 38mm depending on the version and the subject isolation wouldn't have been as good since smaller apertures mean more in focus, not less.
If you can afford the time to swap lenses and shoot things that either don't move, or do move but just not very quickly, you'd probably be better off getting a 35mm f/2 prime for around $200-300 new and then a 50mm f/1.8 prime for around $100 and for $300-400 you'll have the whole 17-55 range covered at f/2 or faster for the most part for one-third the price of a professional mid-range f/2.8 zoom, and still cheaper than most of the consumer mid-range f/2.8 zooms. In fact I did just that for months after my daughter was born. But then the thing learned to crawl and now walk and I just couldn't keep up with her with the primes anymore.
So I needed a mid-range FAST zoom. I didn't want the flimsy build quality of the consumer f/2.8 mid-zooms nor their ugly bokeh and some of their other attributes, got a nice bonus check after some extra hard work, and so I splurged on the Nikkor.
If I'm just walking around during the day though and am not going to be shooting at apertures larger than f/8 doing scenic type photos where I want lots of depth of field, the 18-55 kit lens is perfectly fine. Heck, even wide open they're fine. No they won't be as sharp as the pro lenses, but you can sharpen them up to look about the same after some post processing anyways. The reason to pay a lot more is for the stuff above that you can't really replicate well or even not at all in post processing. Like tight depths of field for portraits, creamy smooth bokeh, and nice color and contrast anywhere on the lens. The kit lens loses color and contrast at its long end, but not the pro lenses. They look great everywhere. The $100 50mm f/1.8 prime lenses are just as sharp, colorful, and contrasty at 50mm and also a stop faster. The professional zoom just gives you the ability to zoom in an instant, for 12 times the price.
I got it because I like to do a lot of transitional light night time or very early morning photography where VR is ok and you don't necessarily need fast glass. Here's how it did vs my FIVE times more expensive Nikon 17-55DX f/2.8 pro lens in its first test.
