That's because the Nikon D40 does not have Live View. Up until a couple of years ago, no DSLR's had live preview, due to the design of a DSLR over a point and shoot, as it has a pentamirror arrangement that effectivly deflects the light path to the viewfinder and only to the sensor when the internal mirror is raised. Early live preview models from Olympus had the world's first Live View system by flipping the mirror so that the picture preview could be seen on the rear monitor. Most manufacturers now incorporate Live View into most of their models but most Nikon consumer models do not as yet, apart from the newly relesed D90. The D40 and D40x are two year old designs and therefore do not have the more "modern" specs of say the Olympus E520 or Canon EOS450D. Most photographers trading up from a compact to a DSLR are surprised when they cannot use the LCD monitor in the same way. However for most aspects of DSLR photography Live View is not something that is used all the time, low down shots, and macro perhaps being the most convenient use, but for general photography there is no substitute for framing through the viewfinder, that's what we've been used to doing for over half a century! Besides as pointed out previously a DSLR is often too heavy to hand hold at arms length especially with a long lens.
I'm afraid not. The camera is a DSLR, (digital single reflex camera). There is no way to use the LCD display for preview. The shutter is closed until you take a picture. Since the mirror reflects the image to the view finder, the camera has no way to capture the image.
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