movephotography

The 50mm focal length, by the way, means you would have to step back 12-15 ft from groups of people to photograph them, and it will be difficult to get good pictures of buildings, etc. Just to give you an idea, at my regular working distance from my laptop, a 50mm lens on an XTi won't even capture the entire computer screen (but it comes close). The kit lens is more versatile. But the 50mm will outperform the kit lens by a mile in low lighting or shots where an interesting shallow depth of field is desirable.

The other poster is exactly right about lenses - make sure to go to the store and look through the 50mm lens (or the 18-55, set at around 50mm) to be sure that you are comfortable shooting a variety of things with it. Make sure to look through the 50mm lens on an XTI - if you happen to look through it on an EOS 1Ds or 1D or 5D, it will look very different due to the field of view crop. That said, a significant number (probably almost half) of the shots in my photojournalism portfolio have come through that lens. Photography gets very expensive very rapidly! One other thing, make sure also that you want to go with canon and not Nikon. There are good things to be said about both systems, it is largely a matter of personal preference regarding menus and usability (I have to shoot Canon because otherwise, I wouldn't be able to borrow $5,000 lenses from newspaper photo closets to shoot sports).

Just re-read and saw that you specifically mentioned that you like how small it is - in that case, I would go with the XTi over the 20D.

The XTi's decent but feels kinda small and plastic to my hands. If you agree, consider getting a used 20D or 30D on ebay - you will be able to find the former for under $400, the latter for under $600. The 50mm 1.8 is precisely the lens to start with. Don't bother with the "kit" 18-55mm lens, it's junk. I would spend your extra money on a flash, maybe a used 430ex - a good flash will make an enormous difference in your photography, even more so if you buy a kit that will allow you to take it off camera. Zooms vs. primes are largely a matter of personal preference - I almost bought a 20mm prime lens to do photojournalism work, but I ended up with the 16-35mm f/2.8 due to autofocus speed.