I think the 7D may be a better bet in the long run. It will still take the lenses that I have and seems to be the best Canon going before you move into the Pro league. I know it means a fair bit more money
It's a hell of a lot more money and to be honest, despite how good it is, probably not worth anywhere near the difference between £350 and £1200 unless you're massively into shooting JPGs and need massive amounts of cropping or printing billboards.
The XXDs evolved to a stage with the 40D where it's Good enough for almost anything from weddings to press work - may not be the best but for under £400, it's amazing value and imager wise IMO better than the 50D (which should have got the fabulous 12Mp sensor which was Wasted in the 450D) ..
I use the 40D as a backup to a Brace of 1DS MK2s for the main part of my Job (rest is Nikons) and I'd not hesitate to use it in confidence if the 1DS2 blew a gasket - OK my 40D's AF is Bang on despite not having Microtuning (as good as the best, finely tuned 50D) and a lot of XXD cams (including the 7D from the forum posts) can be troublesome for AF....
Lets get real here - I used to do my whole job on a 1D Mk1 (a noisy £4500 4Mp Pro DSLR from 2001) and a D60 (No, not the plastic Nikon toy thing, the slow £2000 6Mp Canon from 2002) and so did millions of others and if anyone back then offered me a "Super-D60" type cam with 10 clean Mp, 6.5FPS and a 3" LCD (which even on the 40D , when compared to a 1D Mk1 screen is like comparing a 52" plasma to a 70s "Sinclair Pocket telly") for £350 mint boxed, I'd be looking for Martians landing or in the very least, the Police ..
But Bodies come and go and time moves on, I'm sure you'd get loads of mileage from a 40D and when they Finally put the 1D series AF in a XXD type body , or at least an AF system which doesn't keep AF issues threads filling the front page, you can upgrade gladly in the knowledge you didn't lose much if any money in the mean time and to be honest, not lost much, if anything in image quality .
Just my thoughts on the matter after running Canon DSLR bodies in a working environment for over 8 years...
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Please ignore the Typos, I'm the world's worst Typist