My review of the HMC40 will appear in December DV Magazine.
For the price point, I am very impressed with this camera. The combination of the efficient AVCCAM (Panasonic's implementation of AVCHD) and small form factor makes it an excellent entry-level camera or even as a B camera to the HMC150.
While more expensive, also look at the JVC HM100.
There is debate over whether AVCHD is superior to the XDCAM EX codec of the HM100. I like the control layout of the HM100 better. But HMC40 is also $1000 less expensive (presuming you purchase the $500 XLR block for the HMC40-- otherwise your savings is $1500).
Either camera is superior to the tape-based HDV you are currently shooting.