I don't know why the Garmin GPS40 doesn't work well for you. It seems to me like it should.
I tried using a car GPS unit for locating waypoints and I found out that the common car GPS chipsets have a mode which is enabled by default to purposely stop sending coordinate updates when the velocity of the unit gets below a certain point. This is to keep from sending tons of data while the car is essentially sitting still. If you hold a car GPS and walk around slowly, you will not get very good results because you are moving at too slow of a speed so it doesn't update your position. If you start jogging or running instead you will often find that the GPS kicks in again and you can get very close to the standard 30 foot resolution claimed by most GPS devices.
The handheld hiking GPS units should have this mode turned off so that you get constant updates to your current coordinates. But perhaps this unit is the exception. If you walk very slowly does the unit still update your position or do you need to travel at a higher rate of speed to see updates occur?