I have the same lens - it is f/3.5 rather the f/2.8, by the way.
Although it doesn't have autofocus, and it won't couple with the metering on digital Nikons (or any Nikon film body having AI metering), it does work in manual on the D40 and D40x*. It actually works very well against the light. If you don't need a faster lens, I can recommend it.
The C means that it is multi-coated.
*It is a 'pre-AI' lens, and may damage other Nikon film and digital bodies, so check for compatibility before buying or trying. This compatibility with pre-AI lenses is one of the advantages of the D40 and D40x over other digital Nikons.