I have had the XSi for about 2 weeks now and I am thouroughly impressed with it. This is my first DSLR and I was a little wary about going with a brand-new and untested camera, but I have always like Canon (I used an ELAN II in High School and I bought a SD600 about 2 years ago to take snapshots of my son). Overall, I have not been disappointed with the quality of the photos that the XSi produces. The IS lens works great and I have taken some pretty amazing photos (for me at least). I do have just a couple of issues, both good and bad, that I think those who are looking at buying this may want to know.

Battery life -- Great battery life. I should say, AMAZING battery life. I have taken about 1500 photos and I am still on the first charge. I know that you can't judge battery life by one charge, but still, if I get half this many photos in the future, I will be happy.

Live View -- I have not yet learned how to get the camera to autofocus in Live View. You can't use the 9 point autofocus system while in Live View (it uses a different contrast-based system, if I understand correctly, which isn't nearly as accurate), so it may not make that much of a difference. I think that Canon put this functionality on as an afterthought so they could compete with Nikon, Sony and Pentax. You also can't use it in the AUTO mode (Green Square). This isn't that big of a deal for me, I prefer full manual myself, but the whole point of this feature, I thought, was to make it more user friendly for the Point-and-Shoot photographer. My wife can't use Live View in it's current form (I specifically bought a DSLR with a live view function so she could still use the camera). So, if Live View is a big selling point for you, You may want to look at some others (If it isn't that big of a deal to you, then this is still an amazing camera -- added 4-23-2008). If you do studio work, though, you can hook the camera up to your PC and use it as a remote viewer. But it is not a point-and-shoot camera in Live View. You have to mess with too many setting to get the image just right, and for me, it just isn't worth it. Hopefully, Canon will fix some of the functionality problems in a future Firmware update.

Image Quality -- I have had some great success shooting in a studio setting as well as some great outdoor shots. In the studio, I used tungsten "hot" lights with the subjuect against a white background. The photos turned out great. Skin tones are perfect and there is very little, if any, chromatic abberation at the edges. It shoots great outdoor shots as well. We just got into beekeeping and I was able to get some AMAZING shots of our bees up-close outdoors. The bees looked dirty and not very interesting from a distance, but the macro photos I got up close are beautiful and full of wonderfully crisp details. The lens is a little short, the image quality you get from it is pretty good considering it only costs $100. I do plan on buying a longer lens in the near future.

Overall, the camera is solid and feels nice in the hand. It isn't too heavy, yet still feels sturdy. If you can afford the higher price, I don't think you will be disappointed. If you can't, the XTi is still a great camera. And if you can afford to wait a few months for the price to drop a little (or to get a good used model) I would. I was able to work a few extra weekends so I could afford to get this, and I can tell you, I don't mind it a bit, because the quality of photos I am getting has been totally worth it.

--- Update ---
I was incorrect when I said you couldn't use the 9-Point autofocus in Live View. You can use the 9-point autofocus while in Live View, but the mirror flips down and focuses so you can't see what you are trying to focus on until after the camera has actually gone through the autofocus process.