If the difference isnt much between the 2, I would go with the XTI. Along with the dust removal system, the autofocus is so much quicker. I upgraded from the XT to the XTi. But I only did that because of the Costco return policy. So I upgraded for free. Otherwise, I would not have upgraded.
As for the lens kit, IME, it only works decently at its midrange with very good lighting. I only have it since Costco only sells it with the lens. I really like the 17-85 IS that canon sells. Great walk around lens. It is a little pricey, around $500. But awesome lens and most reviews say its almost as sharp as L series lens, but for half the price. I'm now saving up to get the 100mm Macro though.