Upgrading to dslr, did i make the right choice?

The d40 might just be your "gateway drug" to nicer Nikon bodies, and you did fine. The D40 is light, has pretty good battery management and the kit lens you got with it is also light and good. That's not a low-light/high ISO setup you have there, but it's got better metering and a much faster focus engine than your pocket camera does.

Get out there with it!

Cool. After I buying it, I felt worried about it being an older model. I'm excited to get some shots with it.

I still shoot with my first dslr. It's the d80 so it's heavier and older if a bit higher positioned in the line up.

You get a lot of nice options with that camera. And a good price so you can find out if dslr is for you.

I shoot with a lot of different bodies, however I constantly find myself resorting back to my D40 for shooting as my "go to" body. Although Nikon refers to it as their "Amateur" body, when I compare it to my D200, D7000, etc. it's hard to tell unless I'm blowing it up for print. Screen savers, print material < 24" tall, Facebook (although I never post anything on facebook in spite of how bad it compresses the photo) it's perfect.
If I were to recommend a camera to someone wanting to learn how to shoot and get away from the "Auto" function, no doubt it would be the D40. Also the other plus side is you paid very little for a great body, and still hve left over cash for some great glass to shoot with!

D40 is fine. It'll make very good photos at lower ISOs, and much better high ISO photos than a p+s camera. You'll have a lot more control over your photos, too, which is great if you want to do that. You might want to get an extra battery and a circular polarizer for the lens. Also, you may find some use for a small tripod — I often wish I had one after the sun has gone down in the mountains. Even just the Gorillapod DSLR can be useful, and it's light.

And if it gets trashed falling down a cliff, it was only $250….. :)

Now that you have a lens that you can screw it onto, get a polarizer filter.

This will be $40 to $90.

And make sure it is multicoated or you will get strange colors.

When you take pictures, rotate the filter so that the sky is the darkest before taking your shot.

for an example of why you want a polarizer:
http://www.flickr.com/photos/victorvonsalza/2387551911/

I keep one on the lens when I am outside and the sun is up. It makes (almost) all of the pictures look better.

I love the shot that you included in your post.

Another fun thing to do is to get some neutral density filters, There are some 9 stop filters that appear black. Then when you take pictures of fields of grass, or of moving water, everything seems to flow, and is smooth. You can get pictures in the 2 minute range that are magical.

amazon link: about $50 http://www.amazon.com/Hoya-Neutral-Density-ND-400-Multi-Coated/dp/B001197322/ref=wl_it_dp_o_pdT1_S_nC?ie=UTF8&colid=22FWH9DPO1EIT&coliid=I1ZCHR27FTYIGV

flickr link:http://www.flickr.com/search/?q=nd-400

-Michael