I would suggest working with a 38" x 18" image. There's no real reason to go over unless you have really bad cutting skills, but I plan on taking my art to Kinkos and letting them deal with the printing/cutting headache. If they screw it up, that's fine...They end up reprinting another one and cutting it again on them..heh
Seriously, if you go 40x20, you have to make a concious effort to not put anything in that space that's going to get trimmed, or scale the picture down, which doesn't always come out right on the fine details...Not to mention at 300 or 600 dpi, your adding a lot to the filesize as well...
As for the image size and print size, they are independant, but you normally print at 100% scale...