You can get a 20D kit with the 17-85 f4-5.6 IS USM lens for $1999, or so.
Or buy either body only, and get the lens of your choice.  You don't have to
get it with any lens at all.
BTW, I have the 20D, and so does my wife.  We both feel the Rebel XT is too
small for comfortable handling, but you may fell different.

Talked to a professional friend of mine about this very subject when the XT
first came out.  His opinion was that it may be better to get the XT body
and then spend money for a good lens.  Sounded like a good idea until my
local store got a few XT's in and I had a chance to hold one.  IMO it's way
too small.  So...  I'm not holding off for a 20D to go along with my 300D.

--

Rob

Have a careful read of the following comparison - I think it'll answer your
question ...

http://www.bobatkins.com/photography/digital/eos_digital_rebel_xt_vs_20d.html

From my own observations with the 350D ...

It IS a 'petite' camera, but I haven't had any issues operating it with
"fairly average sized blokes hands" - and if size is an issue then there is
an optional battery grip that you can purchase.

Having said that, the 20D appears to have a modest number of advantages, and
is by all accounts a more solid camera. I guess the fact that it weighs more
would be an advantage or a dis-advantage depending on which you'd prefer.

I tend to think of the 20D as being "one step up" from the 350D.

Cheers,

CC

My question to you is why would anyone buy any camera with the "kit"
lens?

Buy a body and then get the best lens for it.

********************************************************

"A nice man is a man of nasty ideas."

          _Introductions to History of the Reformation_
                   Jonathan Swift
                      1667-1745
                   

If the XT is comfortable in your hand, it may be a good value.
I couldn't stand it.  That alone did not justify the extra money
for the 20D, but together with a couple of other usability issues,
it was no contest.  The information you get in the LCD on the top
of the 20D is absolutely essential, and *very* handy on top, this seems
like a small thing but I don't think so.  

The control you get from the dial on the back of the 20D turns out to be
extremely useful.  If you shoot any kind of action at all, the 20D buffer
is a huge win.    If you shoot natural light indoors, the 20D autofocus
and exposure is better.  20D battery life is reported to be much better.
(And battery life was one of my main criteria.)  I appreciate a metal
camera body more than plastic.

The kit lens is plastic with a wobbly front element.  I can't believe
Canon made this lens.  But, it actually is fairly good, and I doubt
you'll find an 18mm that can replace it for anywhere near the price.

One motivation for getting into the Canon system is the excellent lenses
that are available.  That's assuming you have the budget for these
lenses, or whether you expect to.  The f/1.4 50mm EF/USM lens is truly
remarkable.  The f/1.8 50mm lens is only $75 and gets the job done.
There are some infamous EF zoom lenses out there.  You might get by with
an aftermarket lens like a Tamron, they range in quality and
performance.  I'm not into Zooms at all.  I want a very wide prime, a
very long prime, and I think I'll be done.