I bought the 18-200mm VR lens as a kit with my D200. I had the D40 and used it quite a bit then. I will re-purchase a D40 and will most likely leave it on. On a side note the 1/500 sync speed with flash is the main reason I am buying this camera again. The use of this lens coupled with the D40 and SB400 makes for a very good traveling set-up. Outdoor shots in bright sun will yield good results in people shots sans the dreaded "racoon eyes".
I have read the comments on the distortion and softness. I don't find it as prevalent as some have experienced. The SB400 is not underpowered as I have read and use it regularly with my D200. Only downside is it does not allow the FP high speed sync. Thus, the re-purchase of the D40.
Back the the 18-200mm VR. There is a downside to the size of the lens when taking wide angle indoor shots with flash. The front end being so large will leave a dark semi-circle at the bottom of your pictures. Using the inboard flash that is.
What it really comes down to is what you want and what is out there to fill your need within your personal budget. I prefer primes for specific type shots that don't require swapping lenses back and forth. The 18-200mm VR is at a better price than it was at first. For the range it has and the convenience it does a nice job.