Blue,
In stable weather conditions a 737 is more stable on speed with flaps 40 than with flaps 30. This is due to the higher drag and thus highr thrust settings. On the -300 and 400 the difference for the Vref is only a few Kts. On the -800 and -900 however it give you a Vref which is about 7 or 8 Kts lower than flaps 30.
On a gusty day it is customary to increase the Vref by a certain amount to account for the gust. This brings you closer to the placard speed of the selected flaps. Over a certain amount of gust this margin becomes a bit narrow for comfort. That is why on a real gusty day we normally do not use flaps 40.
With greatful thanks to flaps40 (who is presently on hollyday in the americas) for the use of her lovely name.
Squelch