This is the first interchangeable lens DSLR that I've bought -- I've been waiting for Canon to solve the dust-on-the-sensor problem, and yes, they've really done that. Look, ma, no swabs!
Prior the digital cameras I've used have been Minolta's, culminating in the A2 (which got up to 8MPx). The most obvious difference is in the noise -- that is, the A2 had lots of it, and the XTi very little. At ISO 100 and 200 it's really clean, showing up a bit at ISO 400. The other difference is capture speed -- with RAW+JPEG, the A2 was sloooow.
The 17-55/2.8 IS zoom is really amazing: "L" quality optics which about match the 24-70/2.8L. Regardless of the future of reduced-size sensors, I know I'll keep around a Digital Rebel with this lens as an all-around walkabout camera.
I do miss the quick-control dial from the high-end Canon film/digital cameras, for rapidly adjusting the exposure compensation. However, the RGB histogram w/flashing highlights is pretty handy, and the pattern metering function usually needs only 2/3 of a stop correction for special cases -- which means bracketing at 2/3 of a stop will handle nearly every situation. Since it's easy to delete, I can now just use the histogram as an exposure meter, making a separate handheld spot meter very nearly redundant -- a significant workflow change.
However, the location of the exposure compensation button on the camera is hard to find without looking, and too close to the self-timer button (this is not a problem shooting vertically with the battery grip).
The LCD panel is pretty good, only washes out in strong, direct sunlight. While the viewfinder image is small, I find that I can see everything even while wearing sunglasses, i.e., with a high eyepoint.
For my hands, the XTi is a bit small (compared to EOS-1/3), particularly with a lens as large as the 17-55 zoom -- the lens weighs about as much as the camera. Almost immediately I found I had to have the battery grip, just to get a good grip on the camera, and I like having the controls for shooting verticals (reminder -- shoot more verticals!).
Considering that a couple years ago, a 1DS cost 10x as much, it's a steal at this price. Now I'm waiting for a 1DS Mark 3 or some such to bring the self-cleaning function (and 22MPx) to the high-end lineup...