I want to know how to take crisp indoor action shots?

I have a Nikon D40 and have taken great pictures of outdoor sports with the continuous shutter speed setting. Virtually everything else was on the factory setting from what I can tell. The pics were crisp and it looked like the camera stopped time to get the shot. When I try the same thing for indoor sports the continuous shutter doesn't work on the green "auto" mode, so I changed it to "sport" mode. The pictures are blurry at best, most times not even recognizable. It seems like the shutter speed is slower than the outdoor pics. Please help! My kids are not getting any younger and I'd like some good keepsakes.

The problem is low light level. That leads to longer shutter opening for correct exposure. Either raise the ASA or ISO setting to maximum or use electronic flash (not very friendly) or get a very fast (larger aperture) lens.

When shooting sports indoors, you need to do a couple of things.

Use a fast lens, f/2.8 or faster
Set your cameras shutter speed to 1/500th second
Raise the ISO until you can achieve such a shutter speed

Here is a sample shot using a 300 mm f/2.8 lens with the ISO set at 3200

Also remember to set the white balance to match the lighting on the courts.

I use 3130 degrees Kelvin when shooting on an NBA basketball court.

That's normal. Try increasing ISO without introducing much noise/grain into the pictures.