Mine would be to forget about replacing it.  It's far from the
best lens available, but it will do a decent job for you just as it
has for countless others.  If you compare the pictures it produces
with what you used to manage with your old P&S, you'll probably
notice a big improvement.  Enjoy it while you can.  :)  Eventually
you may bump into some of its limitations, but many Rebel owners
don't, especially if they don't make many very large prints.  If you
ever get to the point where you *really* think a lens upgrade is in
order, you may also want to upgrade the Rebel XT to at least a 400d,
or whatever the next version of the 400d is called.  To paraphrase
the Stones, you shouldn't try to get what you think you want.  If
you get what you need that should be good enough. :)  It will allow
you to learn and improve your photographic skills while other gear
heads are spending more time reading reviews and photo magazines,
and learning to use their 'nice but not essential' new gear.

I'd say go get the kit lens and use it to develop your photography learning
curve.
granted, it isn't an 'L' series lens by any means, but around f8 or f11 you
can get some very pleasing results.
after using the kit lens, you will know in yourself about what sort of lens
to look at for a future upgrade.

This was my primary lens for 2-1/2-years.  It did OK for a ~$140 lens.

Recently, I replaced it with the EF-S 17-85mm f/4-5.6 IS USM.

<http://www.usa.canon.com/consumer/controller?act=ModelInfoAct&fcategoryid=149&
modelid=10511>

I am still getting used to the new lens and haven't shot enough frames to get
a really good "feel" for it.  However, what I HAVE experienced so far
convinces me that it is a significantly superior lens.  For ~$500 more than
the new price of what it replaced, it OUGHT to be!  Good luck!

Try out the kit lens and make your own decision. I have some L series glass
(70-200, 100-400, 600)that I use for wildlife but I turn to my Kit lens for
family and off-roading (4x4) events. It's a nice lens for the price. If
you're not a pro, you'll probably like it too. There are better lenses, but
it's a good starter lens to help you get introduced to the dSLR world.

FWIW, I moved to the XTi but from an SLR Canon film

Rather then blindly buying the kit I went to the local pro camera shop
to ask about both the body and the lens. He never bashed the lens but
politely asked me what were my expectations.  I replied a serious
amateur  and he directed me to an up-scale kit with the same body but
the 17-85mm f/4-5.6 IS USM lens. It was about $400 more for the better
lens. I do mostly outdoor scenery and only take people when my wife
forces me at family gatherings. ;)

I'm looking at the Canon 70-200 IS f2.8 but is damn  heavy and about
$1,500. I can probably get buy with the 70-200 IS f4 for about a grand
and a lot lighter.

I'm quite pleased but just like any camera there is a learning curve.
The good part as we all know,  just shoot and shoot as it costs nada.

-DF