This is very interesting and goes against what I read about in reviews. I was considering the upgrade myself but was put off. Do you have any comparison 40/50D shots that you could share, you may change my mind..
The 50D was launched with an unheard of number of pixels on a crop sensor and all the doom mongers forecast disastrous noise with that pixel count. Canon actually claimed a one stop increase in noise performance over the the 40D. We now know that the 50D came with Highlight Tone Priority and Auto Lighting Optimiser enabled by default. Both these settings are intended for jpeg shooting only and have quite a severe effect on noise if enabled for RAW shooting. How many of those original reviewers were aware of this I don't know, but not many I'd wager, so the brickbats were inevitable.
Both the following shots were taken within seconds of each other, the first with the 50D, 500mm f4L and 1.4 TC - the second with the 40D, 300mm 2.8L and 2X TC.
Both were shot at 1600 ISO in dull light. Both are substantial crops. Both were shot in RAW format with no sharpening applied either in camera or at the RAW stage.
Both shots have had NR run just on the bg and the normal sharpening one would expect to have to apply to an image reduced to 800 pixels on the longest side.
The significant point is that I've started applying sharpening to the 40D image which is already showing pronounced noise in the bird's underbelly despite the fact that the image is still soft. Further sharpening will just further amplify that noise and any other noise present in the image.
The advantage here isn't just down to the 1 stop noise advantage (which I believe is real) it's due to the originally cropped image being dramatically physically larger in the case of the 50D. The smaller the original cropped image, the larger any noise is going to be even when the image is reduced in size to 800 pixels on the longest side, and that is bound to have a significant effect on the quality of the final result.
It's possible of course to produce a decent quality image from the 40D version, but it will require a lot more work in processing and even with further sharpening, it wont be resolving the fine detail of the 50D version.
I'm not trying to convince anyone that the 50D is the camera for them, but given my preoccupation with shooting small birds with long lenses - the advantages for me are real and very siginificant. Depending what kind of photography you're into, your mileage may vary and you may well be served better by a full frame sensor and less dense pixel count, but on this showing if Canon can give me more pixels on a crop sensor with this level of performance - I'll take 'em please.