For an older SD40 if have a few options for decoder placement. First is the hardest to mill and that would be the fuel tank, this is were Aztec used to mill the frames for so if you have other SD40/45s with milled frames from them you can just copy them. This requires more milling and requires a large wire path along side the motor to get the wires from the fuel tank to the light boards. It also requires more of the frame (=weight) to be removed.
Another option and what I prefer to do these days is to mount the decoder in place of the light board. Installing a DZ here much easier as you only need to remove and 3/4 inch from each frame half and carve a smaller wire patch to the motor and the front light board. I typically remove the rear light all together but you can wire a resistor and LED directly to the decoder for the rear light if you want.
For milling the frame I use the High Speed Cutters http://www.dremel.com/en-us/Accessories/Pages/SubCategories.aspx?catid=2070&catname=High+Speed+Cutters. To make quick work of the back part of the frame I use a 115 cutter, for the wire runs I use the 199 or 198 as I can get them into places better than the 115 and the wire run don't need to be that big.
PS If you don't already have the DZs on hand you might want to look at the TCS CN-GP decoder as it's more of a drop in as it replaces the lightboards and only needs a little room for wires to and from the light boards and motor.
Jerry
www.washingtonbeltrr.com
I did all the necessary carving with these 2 models from Dremel , it went like a charm , the only problem is the frames coming very hot after a couple of minutes , had to stop to cool it down a couple of times . The decoder is installed and everything is fine , I had always been afraid of milling the frames myself , I should have done it before !
Happy New Year all !