>...I've been toying with the idea of upgrading to a D90 or D7000 >for bracketing, better low ISO and just all around more >flexibility...
Looks like you have a good idea about why you might want to upgrade, so you'll just need to decide whether these things are worth the money to you.
I don't have any of the cameras you mentioned, but I do have a D50 that has the same sensor and image quality as a D40, and added a D300 when they came out about three years ago. I still use the D50 a lot, and frankly, for 90% of my photography you wouldn't be able to tell which of my cameras I used. If you did upgrade, my conjecture is that in most cases you wouldn't notice an improvement in your photos.
For high-ISO, if you crop a lot, or print big, then you might see a difference. So, if money is an object, if you can't look at your photos and say "This picture would look better if..." and then whatever that "if" is would be helped by the new camera, I'd say just stick with the D40 for now.
I can understand wanting a new camera, though, and if you did decide to get one the D7000 would get you more in the ISO department, plus get you the extra pixels, and other benefits. So, it is easy to say get the D7000 rather than the D90. The only reason you'd rather get the D90 is because it is less money, but for less capability. If you're thinking about upgrading because you want a more capable camera, you might as well spend the extra money and get today's state-of-the-art. Easy for me to say, since it's your money!