Hmmm .... As a 20D owner who recently bought a 1D III and plans to get a 40D before too long, I should be well-placed to answer your question. It's a bit early yet for me to give a proper answer (I don't have a 40D and I've only had the 1D III a short while), but I'll have a stab at it.
First point: the 20D is a very, very good camera. Its delivered image quality remains very close to the absolute top of the pile amongst sensibly priced units - it is, for example, marginally but clearly superior to the 10MP 400D (that's just my opinion, but I do own both), and probably also to the various semi-affordable Nikon & Pentax models out there - D200 and K10D and so on. (Even if you disagree on this last, only a fool would deny that the old 20D is very much amongst the leading bunch, even at this late stage in its lifecycle.)
Second point: most of what has come along since the 20D has made only small differences to (in the main) peripheral factors. The 30D brought a bigger raw buffer, slightly better controls (ISO in the VF at least some of the time, for example) and a bigger LCD (as if anybody cares). Many of the 40D's improvements are similarly to do with factors that don't impinge directly on image quality - but by the time you add them all up, they amount to a pretty fair swag of features. The most important, in my view, are the better viewfinder (if you can't see it properly you can't photograph it properly), the sensor cleaning (this makes a huge difference to usability) and the (apparently) better autofocus. The extra speed is kind of nice, the improved menu system is welcome, the extra few megapixels are neither here nor there ..... really, the 40D (for us 20D owners) is a fairly modest upgrade. What remains to be seen is the delivered IQ ("delivered IQ - i.e., under real life conditions, studio test results are irrelevant) and the difference in autofocus performance.
3rd point. I'd be very reluctant to step backwards in usability to something like a 1D Mark II. Sure, it's fast and robust and delivers a good image with great autofocus, but do you really want to dive straight into the stone age of neolithic battery technology and a two-handed control set that Torqumada would have been proud of? After a 20D, you'd hate it. (Well, I would.)
4th point. After a 20D, the 1D III is heavy, very large and cumbersome, and rather complex to operate. But you get used to all that pretty quickly. It is also incredibly customisable, so before too long you will have it set up to operate almost exactly the way you want it too. For example: I really hate the way that all the Canon cameras flip into arse-backwards mode as soon as you go to manual instead of aperture priority. You spend 95% of your time with aperture under your finger and exposure compensation under your thumb. It becomes second nature - and having this sort of thing become second nature is vital if you want to take great pictures at the perfect moment rather than fiddle around with your gear all the time and mess stuff up - but the moment you switch to manual exposure on a Canon, everything is backwards! Your finger is now doing shutter speed and the aperture disconcertingly switches to the dial under your thumb! Drives me nuts! But with the 1D IIII, you can set a single custom function and never be bothered by it again. The ID III has dozens of these little improvements, and they add up to a really substantial difference - one that (in my view) goes a long way towards justifying the wallet-crushing price. (You probably get quite a few of them on older 1 Series bodies too, albeit at the cost of some pretty horrible other ergonomic things.)
5th point. Speed. I'm not talking about the famous 10 frames per second here - though that's certainly worth having now and then - but speed more generally. It writes to its flash cards faster, focuses noticably faster, does everything with a sense of immediate action. You never wait for anything with a 1D III: it waits for you. The focus is particularly impressive: faster in good light with a fast lens, and remains sure and crisp down to amazingly low light levels, even with slow lenses or teleconverters. (I spent the day last Saturday working with dreadful light and using a 2X converter on my 500/4 - i.e., centre point only and f/8. It took a while to focus, sure, but it got there, where my 20D with a 100-400/5.6 would have struggled. Very impressive.)
6th point: image quality. Better than a 20D? Yes, for sure. At high ISOs it's fabulous. At any setting, it produces a visibly superior image - but only if you get stuff right. It's harder to hold still than a 20D - possibly it's just a different sort of motion, but my first day or two produced lots of slightly blurry shots because of camera movement. I seem to be getting used to it already, so maybe that's just a practice thing. Watch out for the lower sensitivity! If you are used to the ISO setings of the 20D/30D, you will get a bit of a surprise: 400 ISO on a 1D III is a true 400, where it's about 500 on a 20D. In other words, the scene where you expected to get 1/800th at 400 ISO will only give you around 1/600th, and that can be enough to make a difference. So watch your shutter speeds, and be prepared to dial in a higher ISO than you are used to - note that the clean high ISOs of the 1D III make that a pretty painless matter though.
7th point: crop factor. I'm pleasantly surprised to discover that the 1.3 crop of the 1D III - i.e., "shorter" telephoto lenses - isn't all that much of a factor. What you drop in apparent focal length you make up with bigger, brighter viewfinder, and with better "per pixel" quality. A few quick test shots of a small bird-sized leaf the other day seemed to show that with the same lens (500/4 and 1.4 converter) from the same tripod, in the same place, the quality delivered by the 1D III was sufficient to make up for the smaller-sized image (after cropping) and with both resized to make the leaf the same size on screen, it was close but the 1D III had better detail and colour. I'll test more carefully one day soon and see if the pattern holds.
Returning to your original question now .... at present my feeling is that the top quality lenses really perform well when the conditions are difficult, but I'm not so sure about that applying to top-class bodies as well. I'll need more time with the 1D III before answering that. It might be instructive to note, however, that my 400D performs just as well as my 20Ds when the light is great, but in poor light the 20Ds are clearly in front.
And I guess that brings me to my conclusion, at least for the time being. It is this: if you already have a top-flight lens - a 500/4, a 600/4, or something else in that general class, then by all means upgrade the camera. If you don't - if you are shooting birds with a 400/5.6, a Bigma, or a 100-400, then grit your teeth and keep on saving. Get the lens first: it lasts longer and it's significantly more important.
