Feature wise there isn't a huge difference. The Nikon would give you acces to Nikon's CLS (Creative Lighting System) and wireless flash units. The 40D would give you better high ISO quality and a higher burst frame rate. Bang for the buck the D80 is almost impossible to beat by anything on the market.
Which version of the 18-55 is it? If it is the VR version, it's actually a really sharp lens. Yeah its cheaply built but you have to understand why it exists in the lineup. People don't give its optics enough credit and they discount it because of the low price. Yeah it won't AF as fast as the pro stuff, and it isn't very fast aperture wise either but those things you really do have to pay for.
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