Bellingham! I've ridden up there - on Whidbey and Galbraith. Although we decided you must need a guide to find the good stuff at galbraith because it seemed like we just rode 15 miles of fire road. That was in 1999.
Ok - 400D vs 350D
The main things are that the 400D has a better auto focus system, better high ISO performance, and the sensor cleaning system. People who've never shot with a digital SLR won't appreciate the value of the sensor cleaning. But having done lots of dusty mountain bike shooting and had lots of photos with dust in the sky, I think it's invaluable.
You referred to the D40. There's always confusion because Nikon name their cameras the same and just swicth the position of the letter "D." So are you talking about the EOS 40D or the Nikon D40? I'm using the Nikon D40x right now and I think it's pretty nice. Unless you wanted to buy into the Nikon system, though, I'd still prefer the 400D.
I'm probably going to buy and EOS 40D in the next few days because I need a faster camera. I have the first EOS-1D but the resolution is too low. Even though my 1D is super fast, I'd rather use my 400D for the resolution and image quality. But the EOS 40D is looking really good.
That's all I've got the energy for right now. I'm sure you have more questions. I'll be here, Ask away. Always good to have another outdoor photographer here :-)