Canon's newest Rebel is a high-end camera in a bargain body.
On image quality, it's worth examining how the XTi handles the resolution/noise balance at faster ISOs. As ISO speeds increase, the XTi seems to apply noise reduction in a linear fashion, with gradual increases in noise matched with gradual loss of resolution.
The Rebel XTi also inherits the 30D's extensive image adjustments, notably the Picture Styles menu that allows selection of profiles governing sharpness, color saturation, and contrast. Your choices here affect image quality in ways that aren't necessarily apparent from the menus. The Standard (default) profile, for example, adds enough saturation to colors that photos look like they were shot in the contrasty sRGB color space -- reds, in particular, really pop. For more natural (and accurate) colors, you'll want to use the Neutral Picture Style.
For the record, we tested the color accuracy of the XTi in the Neutral Picture Style; the color test done in Standard dropped accuracy a notch to Extremely High. Similarly, Standard adds a high dose of sharpening, whereas the Portrait Picture Style lowers sharpness somewhat. You can also modify individual settings within any Picture Style or design your own custom profile.
We have mixed feelings about Picture Styles (as we do about Nikon's similar Optimize Image menu). It may be overkill for the casual user, while the more advanced user is more likely to shoot in RAW and make these kinds of adjustments later in image editing. Our advice: Settle on one or two Picture Styles that you like, and stay with them. If and when you reach the point where you want to really fine-tune images, learn to work with RAW files.
The Rebel XTi makes this nearly painless in two ways: You can record RAW files simultaneously with highest-quality JPEGs. And the Canon RAW converter/editing software included with the camera (Digital Photo Professional 2.2) is fairly easy to learn and use.
If you want to add a little warmth or coolness (or some other image tone) to pictures without tinkering with the Picture Styles, you can adjust white balance using a two-axis graphical display -- handy for adding digital filters without having to actually carry optical ones.
Dust can be the bane of digital imaging, so Canon gave the XTi both belt and suspenders for dust deterrence. One happens mechanically -- turn the camera on or off, and the low-pass filter in front of the sensor gets shaken ultrasonically. The other is software removal of dust images: First, you follow a menu procedure to make a dust map -- an exposure that's blank save for the shadow of dust particles -- and the camera will attach this file to the images shot afterwards. Later, you load the images into Digital Photo Professional, which can "sweep" the images clean of the dust shadows. Obviously, this is a procedure for the fastidious worker making big blowups or for one shooting in a dusty environment.
The Rebel XTi gets an upgrade in burst rate, too. While the framing rate remains the same (3 frames per second), the claimed maximum burst jumps to 27 frames from 14 on the XT. We consistently got 30 to 31 frames with a moderately fast SanDisk Extreme CompactFlash card. Maximum RAW burst is 10 frames, and we were occasionally able to squeeze out one more.
The built-in flash of the XTi carries over from the XT unchanged: a Guide Number of 42 (in feet, ISO 100), with a beam covering the field of view as wide as a 17mm lens, and a good range of exposure compensation, ±2 EV in 1/3-EV steps. The XTi is fully compatible with E-TTL II accessory Canon Speedlites. We have to scold Canon, though, for the glaring omission of a built-in wireless trigger for accessory TTL flashes. You'll need to have a Speedlight 580EX ($380, street) in the hot-shoe, or a Speedlite Transmitter ST-E2 ($210, street). All the other cameras in this class -- the Nikon and Sony, plus the Pentax K10D and Samsung GX-10 -- use the built-in flash as a wireless trigger.
So aside from a few inconveniences, shooting with the Rebel XTi is thoroughly pleasurable. It works fast and accurately. No, it's not a bulletproof tank, and some of the control buttons are just barely up from point-and-shoot. But given the image quality, autofocusing, fast shooting, and exposure controls of the XTi, it's not just a deal, it's a screaming, bloody, great deal.