Weatherproofing, larger sensor/smaller crop factor, beefier body, faster shooting, more AF points...
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Well summarized. And yet, I think where the OP is coming from is that for a good many photographers, the 40D will be "close enough" in each of these categories. If we go through them one by one ...
- the 1D III is undoubtedly more weatherproofed; then again I subjected my original Digital Rebel and 20D to snow and rain without issue, and the 40D now has additional protection around the CF slot and the battery
- larger sensor / smaller crop factor is certainly the case, though whether or not this is actually an advantage can be argued either way ... if it had a noticeable impact on the viewfinder, that would be a significant issue, perhaps, but dpreview is claiming that the 40D viewfinder is about as good as the 1D III viewfinder
- beefier body, and most likely sturdier too ... on the other hand, also bigger and heavier (could be considered disadvantages)
- faster shooting (and bigger buffer); but I think 6.5 FPS for 17 RAW images will be enough for many (pretty close to the original 1D Mark II)
- more AF points ... well personally I always find myself using center-pt focusing for tracking on my 1D II and find AF selection much easier on the 5D, whose AF layout is similar to the 40D; I think the fact that all AF points on the 40D are now cross-type will also be a boost
I think it shows that Canon is being very aggressive with the 40D, and as Michael suggested they probably felt a lot of pressure from the D200. A nice example of competition helping out the consumer.
Note: some additional differences between the 1D III and the 40D are that the former goes up to ISO 6400 (3200 is part of the normal operation) and the former has a shutter rated to 300,000 (the latter rated to "only" 100,000)
