I owned the EOS 300 (original digital rebel), and when the XT (or 350) came out, I took a serious look at it. However, I found that the EOS20d offered more, and bought it. I gave my 300d to my wife, and she loves it. The Rebel series cameras are offered as a 1st step in digital SLR photography, and it is great for that purpose.
However, for those that want to go beyond the 1st step, you will probably want the 20d. Otherwise, you find yourself in my shoes, where I bought the Rebel, and then a year later bought the 20d.
So, it all comes down to personal use. If you want a solid camera that takes good pictures, and has some "easy use" features (like sports mode), then the Rebel is a fine camera. If you want to push it a little more, or do some advanced photography, spend the couple hundred extra dollars and get the 20d. (my 2 cents).
To add even more confustion, Canon has come out with some newer cameras, but I haven't had time to look at those!