For a first dSLR Id go new entry level. Not entirely sure why. Maybe because you get more bang for the buck in terms of functions, quality may not be as top notch as a pro body, but the difference wouldnt be enough to make it an issue. I love my 40D but cant help but feel that a more modern live view mode might have been better, and the capability to shoot HD video would have been cool, though rarely used.

I didnt say it didnt have live view. I did however suggest newer models might have a more effective live view, such as more efficient autofocus modes and sensors/screens more capable of running live view. Ive noticed some interesting (and worrying) effects when using it on my 40D in certain conditions. These effects didnt exist on the 500Ds when I tested them at uni, and autofocus worked much more smoothly.

another reason why i want to get rid of the 400d is the lack of spot metering

there is apparently a firmware upgrade/hack that allows spot metering (and also lets you boost the ISO to 3200 - with modern noise reduction software it might not be too much of a problem on the 400D when shooting in RAW)