it's not a 'fault'
basically, most DSLRs have an autofocus motor in the body - which then drives the lens. the d40/x doesn't have one - it uses a motor in the lens.
if you don't plan ever changing the lens, then it's fine. but if you do, they're not as common and will cost more due to having to buy the focus motor everytime.
other things to note. it only has one screen. most other dslrs have a mono status LCD as well as the main full colour screen. This means that when changing settings, the main LCD is on.. which isn't good for battery life.
looking through the reviews of the d40, the menu interface is a lot more newbie biased - with little 'help' bits and examples of what some of the settings do. the kinda thing that'd drive me nuts. some of the settings (like ISO and white balance) are buried in menus (unless u start reprogramming buttons.. but then u loose which ever button you replaced) as opposed to the d50 where they accessible by pressing buttons on the body directly.
i considered the d40, and dimissed it and bought a d50. The d40 uses the same sensor, and aside from being slightly small, ligther with a slightly bigger and fuller colour LCD - the d40 hasn't anything over the d50. The lack of status LCD, autofocus, hidden settings. in summary, the d40 is seen as a stripped out, dumbed down version of the d50. (they both use the same sensor)
one final note, Paul - I didn't realise you were a camera
Well I am a Minolta Z10 which I love