I don't understand how 40 FPS is bad. Your eyes see only at what, 30? Also there ARE updates for CSS still, but it's not based on the new source engine, like Half-Life 2: Episode 2 is.
When launching HL2 EP2 with -dxlevel 81 in the launch commands, I can get solid 20-30 FPS on mid-graphics levels.
Don't get into the discussion of FPS and what the eye can see.
I'm gathering that you're getting 30 FPS from the frame rate that CRT tvs run at? One thing you forgot to mention is that motion blurring is used with the content being broadcast on your TV. This give you to the impression that the transition between frames is seamless. Games generally don't use this (I think in a few games, like Flight Simulator, it's used) and I can't think of any others that do. So, 30 FPS does not look the same in a game as it does on a TV, at least not in CS:S and quite a few other games
Also, most LCD monitors can display a maximum of 60 FPS (and the max for CRTs is the refresh rate), although some can go higher.
Here's an article that goes into more detail about it:
http://www.100fps.com/how_many_frames_can_humans_see.htm
One thing I want to note. Some games, you can get by fine with 30 FPS, and others. In single players games, frame rate isn't as important. With multiplayer games, it is a priority. It can be the difference between figuring out where a shot came from and being able to kill them, and your character dying. A lot of it depends on how "fast" the action in the game is. CSS's action is relatively fast. You really need to be quick on your toes. TF2, I find that it's not as fast and that you can get by with a lower frame rate.
So for me, 30 FPS is not acceptable for CSS. It's "playable." But it's certainly not ideal. I prefer 60+ FPS in CSS. Any lower than 45 and it it doesn't appear fluid to me.
If you feel that 40 FPS is "acceptable," then you haven't played it for a great deal of time at a higher frame rate. Once you're used to it, you don't want to go back, and you can't figure out how you played at that frame rate in the first place.
And as far as updates for CSS goes. I know it's not updated to the updated engine that Orange Box uses. It was only a few years ago that HDR was added, and I think it's only a matter of time before it is updated to the new engine.
