That test shot could have been properly focused, with the 1/8th shutter speed causing the difficulty. In that particular shot, increasing the ISO would have improved the shutter speed and *may* have resulted in a sharper image. A flash would also have improved the light, probably sufficiently to use a 1/200th shutter speed which would at least eliminate camera shake from the equation.
Remember that photography is about capturing light. Understanding how the camera settings affect the exposure helps to understand what the results will be. I think it would help you greatly to understand exposure before worrying too much about metering and focus. Set metering to evaluative, and the focus point to the centre, and concentrate your efforts on proper exposure. When you've sussed exposure, branch out into different metering for creative effects, and different focus points where required.
Ignoring flash for now (because that opens up a whole other area of understanding), you have three basic settings to control light reaching the camera sensor (or film) - shutter speed, aperture size, and ISO.
Shutter speed: for handheld shots, you will always have a minimum shutter speed in order to obtain sharp shots. What this speed is will depend on the focal length, whether you are using an IS lens, and how steady your hands are. People above have indicated that the general rule is 1/focal length (for 35mm equivalent). Your 40D is a crop body, which means that your 35mm equivalent is the focal length multiplied by 1.6. Use the guide Zogger provided to help you here, and remember that this is just a guide and varies with how steady your hands are etc. Without a flash, there is no real maximum shutter speed apart from what your camera limits you to.
Aperture: this is the size of the 'hole' that lets light onto the sensor/film. The bigger the hole, the more light comes through. This also impacts on depth of field (the 'depth' of the focus area), but for now this is a more advanced technique which I wouldn't worry about until you're understanding of exposure is a little stronger.
ISO: Originating from film era, different films had different sensitivity to light. A more sensitive film requires less light to expose correctly - enabling more flexibility for low light shots. In the digital era, this is recreated by applying gain to the light that reaches the sensor, creating the same basic affect to exposure.
I personally would try to select my aperture first, shutter speed second and ISO third. But this isn't always possible, depending on the conditions and the required effect. When you understand how these interact with one another, you'll find adding metering into the equation is quite logical.
Also remember that metering will only control camera settings when not in manual mode. But it will give you an indication of exposure even in manual. Try changing between manual mode and other creative modes to learn when to apply which.
Sorry for the long ramble, but hope it helps
