I'm wondering if you guys can provide some insight into these two lenses. How is the 16-35mm worth $700 more than the 17-40mm?
It's faster - one stop faster. The rule of thumb with photography is that you can hand-hold the camera if your shutter speed is faster than 1/focal length (in seconds, applies to 35mm photography; adjust the focal length to the FOV equivalent for crop bodies, which you don't have so it's a moot point for you.)
One stop doesn't sound like much, but it may be the difference between getting that one shot and missing out.
It also means that there's more glass going into the lens, and it has to be ground to more exacting specifications, which jacks up the cost. Notice, for example, the difference in price between the 300mm f/4 and the 300mm f/2.8 (or for an even more extreme example, the 400mm f/5.6 and the 400mm f/2.8). Price goes up as the lens gets faster, and it is most emphatically not a linear progression.
If I go the cheaper route and get the 17-40, what am I giving up?
1mm of width at the wide end, which isn't a great deal for the most part, but with ultra-wide angles it might be. The difference is a shade over three degrees in the field of view (in whichever direction you're looking at) - 93.3 versus 96.7 degrees in the horizontal plane, for example (assuming a landscape orientation.)
You also give up one stop of light. For ultra-wide lenses, this isn't a massive deal; it depends on what you're shooting, and whether you have a tripod.
Image quality wise, assuming the extra stop is not essential, I
believe (but do not know for myself) that the 17-40mm has the edge at the wide end, where it matters more (because the long end is also covered by other lenses, such as the 24-70mm or the 24-105mm.)
For mostly cityscape photos, would the f/2.8 make much of a difference from the f4.0?
Not at the sort of distances you're likely to be taking the shot from - you'll be beyond the distance that is considered "infinity" for focusing purposes, so depth of field doesn't really come into play.
If you're not certain, my suggestion would be to get the 17-40mm. If the speed becomes an issue, you won't lose out a great deal in the bargain; there's a solid second hand market for any L series lens, and they hold their value pretty well. If you're really unsure, get a second-hand copy, and you stand to lose even less if it doesn't work out for you.
