It is an older camcorder and there might be some disconnect issues otherwise it should work fine. Check to make sure you have all updates installed from Apple.

Any of the Olympus SW series of cameras. The SW standing for Shock and Weather resistant.

The feature is called Live View and unfortunately the Nikon D40 does not support that function.

Hmmmm.....Tricky. OK. First you need to set the ISO up to around 800. You'll have some noise, but we will address that in a little while.
Next set you Aperture to around ....f/11 or f/13. You need some depth. The temptation is to open the Aperture up big but that gives you a shallow depth of field. You should be using a 300mm zoom lens and that will give you the soft depth of field.
Set the White Balance to Artificial Light (Tungsten). Using Auto will mess up the colors.
Lastly...and this is the fun part....Set the Shutter as low as you can but not below 1/60. If the shot looks too dark...back off the Aperture to f/8 or a little larger until you get close to what you want. You might have to up the ISO to 1000. DON'T TRUST THE METER. Keep working with the Aperture numbers. Use you LCD Screen and shot until you like the shot.

As for noise in the photos look into Noise Ninja. It is a Photoshop plugin that greatly reduces noise in photos.