Kodak Touch has a
14.0MP 1/3-inch (4.8 x 3.6 mm ) sized CCD sensor . On the other hand, Nikon D40 has a
6.0MP APS-C (23.7 x 15.5 mm ) sized CCD sensor .
Kodak Touch's sensor provides 8MP more than Nikon D40's sensor, which gives a significant advantage in real life. You can print your images larger or crop more freely.
On the other hand, please keep in mind that Max sensor resolution is not the only determinant of resolving power. Factors such as the optical elements, low pass filter, pixel size and sensor technology also affects the final resolution of the captured image.
Below you can see the Touch and D40 sensor size comparison.
As seen above, Nikon D40 has a 21.3x Larger sensor area than Kodak Touch. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.