I've owned a BV7-32 for four years now and haven't regretted it a single day. True, the BV7-40 is more advanced from a technical point of view. But, especially with the BL7.1 (or 7.2 in case of the 40") I think the 32" just looks so much better than the 40"! The double stand on the 40" destroys the finesse of the combination, IMHO.
Stuff like HD, HDMI and such. Well, fact of the matter is that it's not really needed on a 32". So you won't miss it, I guess. I know I haven't ever missed it. And when I see what good DVD's are capable of on the BV7-32, I really can't imagine it getting any better by having a higher resolution on a 32" TV.
If my telly would be stolen and I'd have to buy another one - it would be another BV7-32. Even if it would be the same price as the BV7-40, I would take the 32. For me, the 32" is the true BV7.
Oh, and... the 32" has the classic B&O red display. The 40" is using a blueish display . At least, my father's got a blueish display. I don't like it...