If you're on a tight budget and want great pictures, if you have small hands, or if you intend to upgrade within the year I'd go for the Rebel. It's a good back-up camera and although it does feel cheaper it takes quality pictures.
When I upgraded last year I went for the 40D and while I love it - it does my girlfriend no good. My fiance has always been my second shooter and is stuck using the rebel even after upgrading again because her hands don't fit around the 40D with a flash bracket and battery grip attached. Now the 40D is my "nightclub" camera - the one that gets drinks splashed on it.
Joshua Camp
http://atlphotographers.com