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I had HO as a teenager in the 1970s. I started in N in 1985, and built a room-sized layout with code 80 track, but with all Microtrains and similar-quality rolling stock. The track was all Peco, which was the best you could get at the time. I've ripped that all down, rebuilt a whole new layout, and this time around, I'm going with all Microengineering code 55 (track and turnouts). I'm sticking with the good locomotives I had before (Kato, some Atlas and the better Lifelike, plus the new Spectrum N-Scale steam, and lots of home-scratch-built-and-improved steam). Couplers are all Microtrains. I think it looks at least as good as HO. I think code 40 is overkill, and you'll have a lot of problems with flange height if you go that route. You can get bulk packs of low profile wheels to convert the cars, no problem. And NWSL makes low-profile metal wheelsets to take care of lighted passenger cars. But the locomotives will be a big pain. Even the best of the best may have some problems on code 40 rail. You'll have this same problem on the new Atlas code 55. But the Microengineering is slightly different, so everything decent will run on it (except things like some old Arnold locos with gigantic flanges). Honestly, I think the code 55 looks really good. You might try using Z-Scale Microtrains couplers. I've used them on some N-Scale equipment and they look better, more in scale.
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