Understand f-stop

Here are the things to understand about lens aperture and it's effect on focus and other aspects of your photographes....

Depth of Field (DOF):
Larger openings (small numbers like f/2.8 or f/3.5) gives less depth of field at a given focal length. Smaller openings (larger numbers like f/16 or f/22) gives more depth of field. When you change exposure using the aperture, you also modify the range of your image that is in sharp focus, which can be used to creatively isolate a subject (with shallow depth of field) or capture a broad subject area (with extensive depth of field).

Sharpness:
Most lenses produce their sharpest image at about two stops less than wide open. If you are using a zoom lens with an f/4 max aperture, it will probably have it's best resolution and least distortion at f/8.

Diffraction:
Stopping down further from the optimum aperture may create extra depth of field but you also lose some sharpness due to a phenomenon called diffraction. You'd want to avoid f-stops like f/22 unless you must have an extra depth of field, or need the smaller f-stop so you can use a preferred shutter speed.

Focal Length:
The effective f-stop of a zoom lens can vary depending on the focal length you use. This is why the D40 18-55mm kit lens is described as an f/3.5-5.6 optic.

Focus Distance:
The effective f-stop of a lens can also vary depending on the focus distance. This is only a factor when you are shooting close-ups. A close-focusing macro lens can lose a full effective f-stop when you double the magnification by moving the lens twice as far from the sensor. The selected aperture then looks half as large to the sensor which account for the light loss. The exposure meter of the D40 compensates for this though, unless you are using gadgets like extension tubes, bellows or other addons that prelude atuomatic exposure.