Nikon D40X and SB600

To start with, the D40 and D40x are identical cameras except that the resolution has been boosted on the sensor.  There is NO functional difference between them.

As far as the SB600 not being compatable, I have no idea why not. I use my SB800 on it and it works perfectly in iTTL mode. The 2 flashes are basically the same functionally as far as I am aware.

You may be confusing the iTTL funtion with Nikon's CLS which allows for remote triggering of the SB line of flashes. It is true that the D40/D40x does not support using the popup flash for triggering the remote flashes (as can be done with the D70 and D200). While the SB600 flash can be used as a remote flash, it does not support being a master on camera flash for the CLS system - you would need an SB800 or SB-R200 to get the CLS system to work on those cameras.

sorry for just noticing this. 
The D40 can't trigger the sb600 with it off the camera. The D70 can but only on one channel. The SB800, the Sb400 ($100 or so) and the D200 all support "commander mode" and can communicate with the SB600. The best way to get off camera flash with a d40 is to skip the iTTL and use a wireless transmitter (the cheapy ones on eBay work fine as long as you get the four channel  instead of the one channel)  If you can, get the SB400 (about half the SB600) then save up for the 600 as a second flash.

This won't give you the power of the big gun studio lights but its really nice to be able to do three light shots with only a few pounds of equipment. I almost never use my second SB600 but use one SB600 on a stand with one of those stofen (sp) omnibounce things and my popup (on a D200) all the time.