You will be able to use it for manual focus, but not auto. It will autometer correctly and all other functions work well.

How important is autofocus? It's pretty important for following action (sports, small children, etc) but less so for scenics and still portraiture.

Funny how we've all become accustom to auto this and auto that. Also funny how many serious drivers won't get anything except a manual transmission car, but scoff at a manual camera.
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Amateur & professional photographer for 45+ years

How crucial is autofocus? "We" got along for the first hundred years or so in photography without it. Ansel Adams never heard of it. It makes life easier in some situations, but it is always nice to override it or do it yourself in the first place. I am going to string together a coulpe of my stock answers, because they answer your question. My discussion on "VR" is in the second part of this message.

If I may, I would suggest that you would be happier with one of the other 70-300 Nikkor lenses. Yes, they cost more money, but there is a reason. The next step up, the "D-ED" lens, has better glass and you can expect sharper focus and fewer problems with color shift. The "VR" lens, which costs almost $500, is still not a "pro" lens, but you would appreciate the increase in quality if you could compare it to either of the other two 70-300 lenses. It's an AF-S lens, also.

I have a couple of pics taken with the 70-300 VR lens on Flickr. Go to my Flickr site http://www.flickr.com/photos/samfeinstein/tags/70300/ and you will find a few pictures made with this lens. Click on "All sizes" and then "Original" and judge for yourself.
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ALL of these lenses can be used with ALL features available on the D40 and D40X:

12-24mm f/4 G ED-IF AF-S DX
17-35mm f/2.8 D ED-IF AF-S
17-55mm f/2.8 G ED-IF AF-S DX
18-55mm f/3.5-5.6 G ED-IF II AF-S DX (The Kit Lens)
18-70mm f/3.5-4.5 G ED-IF AF-S DX
18-135mm f/3.5-5.6 G ED-IF AF-S DX
18-200mm f/3.5-5.6 G ED-IF AF-S VR DX
24-85mm f/3.5-4.5 G ED-IF AF-S
24-120mm f/3.5-5.6 G ED-IF AF-S VR
28-70mm f/2.8 D ED-IF AF-S
55-200mm f/4-5.6 G ED AF-S DX
55-200mm f/4.5-5.6 G ED AF-S VR DX
70-200mm f/2.8 G ED-IF AF-S VR
70-300mm f/4.5-5.6 G ED-IF AF-S VR
200-400mm f/4 G ED-IF AF-S VR
105mm f/2.8 G ED-IF AF-S VR Macro
200mm f/2 G ED-IF AF-S VR
300mm f/2.8 G ED-IF AF-S VR
300mm f/4 D ED-IF AF-S
400mm F/2.8 D ED-IF AF-S II
500mm f/4 ED-IF AF-S II
600mm f/4D ED-IF AF-S II

That's 22 lenses, including 9 VR lenses, one of which is an excellent macro lens. There are also 3 AF-S teleconverters: 2x, 1.7x and 1.4x.

What do the letters mean?
G – A new subset of the D-type lenses, without an aperture ring. The aperture is set by a command dial on the camera body.
D – Lens provides distance to subject information to camera; useful for automatic flash setting
ED – Extra low dispersion glass; give superior sharpness and color rendition
IF – Internal focus – the lens does not rotate or extend as it focuses
AF-S – Auto-focus, silent wave focus engine contained inside the lens itself
DX – Lens formatted for digital sensors that should not be used on full frame cameras
VR – Vibration Reduction – a gyroscopic system to detect and correct camera shake to yield sharp images at slower shutter speeds

Plus, you really can use a lot of older Nikon lenses on the D40 and D40X. You only loose the autofocus feature on most of them. It is true that there is a "slight problem" with older Nikon lenses not autofocusing on the D40, but if you do not own a bag full of older lenses, it is not going to be a problem. It is barely a problem anyhow. If you check http://www.nikonusa.com for "AF-S" lenses, which are ALL 100% compatible with the D40, you will find 23 lenses, including 7 "VR" (vibration Reduction) lenses and one true macro lens with "VR". There are another 25-plus lenses in the current catalog that provide all functions except autofocus as well as many (possibly dozens) "out of print" lenses that will work just as well. In addition, although these lens will not autofocus, most of them will still give focus confirmation. From the D40 manual: "If the lens has a maximum aperture of f/5.6 of faster, the viewfinder focus indicator can be used to confirm whether the portion of the subject in the selected focus area is in focus. After positioning the subject in the active focus area, press the shutter release button halfway and rotate the lens focusing ring until the in-focus indicator is displayed."
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If you want to take pictures that are not so blurry, especially if you are having trouble using a telephoto lens, look for a camera or lens that is designed to help you eliminate this blur caused by slight hand shaking. This technology is known as "image stabilization," "vibration reduction," "shake reduction," "optical stabilization," and "anti-shake" by the various manufacturers. It is "for real" and makes a visible difference most of the time. If you are using an average point and shoot camera without a monstrous zoom lens, you will see the difference in lower light situations where the camera will be using about 1/60th of a second or lower.

If you are using a telephoto lens, the effect will be noticeable at roughly anything slower than the inverse of the focal length, which used to be our standard for deciding when you should use a tripod. If it's a 200 mm lens, you will see the benefit of "IS" or "VR" at speeds of 1/200 or slower. If it's a 500 mm lens, you will see the benefit of "IS" or "VR" at speeds of 1/500 or slower. Actually, you will notice a difference at slower speeds than this, but I'd say that this threshold is where it can be called a distinct advantage. Macro shooting benefits from "IS/VR" also, because any movement will be greatly magnified when you are working at extreme close range with high magnification. Also, I feel that "IS/VR" helps if you are using a point and shoot camera at arm's length as you compose in the LCD monitor. It is much harder to hold the camera still with your arms out in front of you. "VR/IS" would be helpful there, even with the shorter focal lengths.

Please understand that "VR" or "IS" (etc) will NOT stop motion in a moving subject. You need to use a high shutter speed and/or pan along with the subject in order to do that. VR is only to minimize the effects of camera movement to give you a better chance at getting a clear picture. It won't work miracles there, either. You have to at least TRY to hold still. You can't go down a bumpy road in speeding car and expect to get great shots.

This is a composite I made to demonstrate "vibration reduction," which is also called "image stabilization" and "shake reduction" by various camera and lens manufacturers. For the best results, you should click on "All Sizes" and then "Original" before making your comparisons. I tried to remain consistent for all three shots, but I guess as clouds move in and out, things varied by an f-stop or so. I do not think that depth of field is an issue in this test, though. I did not move my feet at all during the test, so the point of view is identical. All three images were made using 1/60th of a second, which I consider to be the low shutter speed for hand-holding a 60 mm lens. I made a reference shot with my 60 mm Nikon macro lens, since I know this to be a fairly sharp lens. I tried to hold as still as I could, but I did not use a tripod, which would negate the need for "VR" anyhow. I then made two more exposures with the Nikon 18-200 VR lens, set at 62 mm. I was trying to match the 60 mm lens, but I did it by just remembering some landmarks and zooming to match. As I used the VR lens, however, I did my best to actually "vibrate" the camera by inducing a tremor in my hands as if I was shivering in the cold. I took one photo with the help of VR and one without. It was extremely odd to look through the lens as I shook my hands.

Since the VR was working, even though I knew I was shaking the camera, the image appeared steady in the viewfinder! Okay, compare the shots for yourself. You won't see too much difference in the top two, but the effect of vibration reduction is very obvious when you see how the picture comes out when "VR" is turned off.

Nikon D200 – ISO 100 – Nikon 60 mm Macro and Nikon 18-200 VR with and without VR

http://www.flickr.com/photos/samfeinstein/511455669/

I realized that the first VR demo (above) may not be a "real world" demo, as I was TRYING to shake during the exposure. Who does that? I was originally trying to answer a question for someone who had a problem with severe tremors, so I was trying to induce tremors in my own hands. Well, I should ask, "Who does that on purpose?"

So in this pair, I was trying to hold still for both shots. The white balance is different, as I am trying to learn about that, but I realized that the first shot I took had the "VR" turned off. Everything else is the same, because I didn't move and the shots were made less than 30 seconds apart. The exposures were the same for both shots. I did not do ANY post-processing at all, as that would defeat the purpose of the demo.

Nikon D200 – ISO 100 – Nikon 70-300 VR @ 240 mm with and without VR

http://www.flickr.com/photos/samfeinstein/755244335/

For a detailed, yet easy to understand explanation, see:

http://www.kenrockwell.com/tech/image-stabilization.htm

Popular Photography writer Michael McNamara has a piece about image stabilization on-line. The two schools of thought are to either put the image stabilization technology in the lens (as Nikon, Canon and Sigma do) or in the camera (as Pentax, Olympus, Samsung and Sony do). He says, "So far, lens-based IS has the lead, with one Nikon VR lens logging a 3- to 4-stop improvement (a few big tele zooms barely reached 2 stops). In contrast, the best result from a sensor-shift DSLR is 2 to 3 stops, with the average closer to 2 stops." Read the whole article here: http://www.popphoto.com/cameras/4615/image-stabilization-special-stop-the-shake.html There is a chart on page two that is a real eye-opener. Far and away the best at image stabilization is the Nikon 18-200 VR lens, which shows gains of 3-to-4 stops!
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