Hello,
The kit lens is nothing special, that's for sure. It's pretty much a freebie with the camera and so in that sense you're getting a canon lens with a decent zoom range for (essentially) nothing. Really though, most people people new to cameras won't be limited by this lens. Check out some examples here,
http://www.pbase.com/cameras/canon/ef_s_1855_35
http://www.pbase.com/cameras/canon/eos_digital_rebel_xti
I have been shooting with an XTi for several months now.
Drawbacks...
-Smaller than most DSLR's. This is totally preference however. Depending on hand size, intended use etc.... Go to the store and see how it feels compared to the larger cameras.
- No spot metering. This hasn't been too limiting as it's metering system is not bad, but from what I understand having spot metering may make the extra difference.
-It's plastic, while others feel more solid. That being said, it's not a daintly little machine. I'm not worried about breaking it or anything of the sort.
-LCD display only. Some other cameras have a smaller screen on the top of the body --> easier to view in bright light. But really, not too limiting for the average user.
I would definately recommend this camera. If you can sacrifice a few megapixels it is worth looking at the 30D (though more expensive). Although, there really isn't anything profoundly different between the two.
In the end, you can't go wrong with this camera. Most importantly however you'll need some good glass infront of it. Budget accordingly.
Cheers,
Rosseau
The big LCD is awesome and is what really sold me on the XTi over the XT.