If it were me, I'd look for an outgoing Rebel XT for a good price. Take the savings and invest in glass as others have mentioned. Trust me, you won't miss the extra 2 megapixels.

I've got an original Rebel (6 MP) and it produces outstanding prints, even at 11 x 14". Glass is key.

Also, don't be too quick to poo-poo the 18-55mm kit lens. It is usually put down by most folks as cheap (and really, it is to some degree), but I've taken some really awesome shots with the lens.

My all-time favorite lens (alas, I had to sell mine) from Canon, from a price/performance ratio, is the 70-200mm f/4L. Awesome glass that you can usually find used for around $500.