The Canon Digital Rebel XT was Canon's answer to the low-price digital SLR void that plauged the genre since the original Digital Rebel was introduced. With a current street price of about $400 for the body, there isn't a cheaper digital SLR from the big 2 on the market. Don't let the low price fool you though, the XT is an excellent body and you are buying into Canon's full range of lenses and accessories. No matter which camp you pull for (Nikon or Canon) ther e is no denying that the XT is a really solid choice. Nikon's D40 is also a strong contender but loses any autofocus ability with older lenses. With Canon, thats not a problem. You have access to their excellent range of lenses, old and new.
The image quality is also excellent. Megapixels aren't everything but the 8mp sensor in the XT is excellent, even compared to Canon's newer offerings like the XTi. The shots are clean, even up to 1600ISO. Noise is managable in most situations.
The one complaint that I (and many others) have is that the body is quite small. This might be a good fit for people with small hands who need a lighter body, but for people with big hands, the grip is not totally natural. Again, its a small quip to have with an excellent camera at a ridiciously low price.