CANON EOS Rebel XSi 12.2MP DSLR Digital Camera w/EF-S 18–55mm IS Retail

Just to note, this DOES come with the IS(Image Stabalized) version of the lens. If it didnt, I'd say get an older model. The XT can be had for around $400 with crappy kit lens.

It is IS lens as it says in the title. It's a good buy unless you wanna wait another couple months for its price to drop after XS comes out.

This is a nice camera, and if the lens includes image stabilization, that could get you going for awhile. Then later on, add the 50-250 IS lens from Canon if you're cheap or 70-200 F4 IS if you can spend more money.

Be sure to also look at other options and handle the camera before buying:

Sony A300, A350, A700
http://www.sony.net/Products/dslr/
http://www.dyxum.com/dforum/forum_posts.asp?TID=24851

Nikon D80, D200, D300
http://www.nikonusa.com/Find-Your-Nikon/Digital-SLR/index.page

and Olympus, etc. too.

My XTi will live for awhile. Can't afford another camera purchase yet.
If you are in the market for a camera this is the one to get.

Even the XT body is good enough for newbies. Save some money for a decent lens.

What do you think of the seller - zipzoomfly.com? Are they an authorised dealer and is it reliable to buy from this dealer?

You may want to wait for the new XS, which is getting excellent reviews and will be an low-cost XSi.
ZipZoomFly is a reliable, trustworthy seller.
When shopping for a digital camera, take the memory card format into account. At this point you probably shouldn't bother with anything that doesn't support SD, so that rules out Sony and Olympus.
Stick with Canon and Nikon for maximum resell value and lens choices.
An excellent low-cost SLR choice that does not get mentioned often is the Pentax K200D, which is also compatible with a bezillion lenses (but it's heavier and more "rustic" than Canon and Nikon)

Go to dpreview bacon and you will see many schools of thought. Some points:
- build a system around the lens, not the camera
- manufacturers like olympus / sony / pentax now have image stabilization built in the body. Nikon and Canon charge you for the stailized lenses. Longer term, Can/Ni will be more expensive to you.
- most DSLRs are good for 90% of the users - professionals are another category. For 90% of the people, the camera is not a serious limitation (it is the skillset)
- just because you bought a DSLR, it does not mean you will be able to take better pics. Consider many **advanced** point-and-shoot cameras available to learn before moving up
- always splurge more on lens - they are keepers whereas DSLRs will keep on changing.

I have an XTi, a 28-105 (w/o IS) lens for everyday, a cheap 50mm/1.8 for close-up, and a coming 50-250 IS for wildlife and ... the moon. I think it's more than enough for a "ghetto dog" like me
I have owned and used many point and shot cameras. My last one is the Canon S2IS. It is good, but nowhere near the XTi. My friend recently bought a Panny FZ50 ($499 on Amazon right now) and its picture quality is not even close to the XTi's.
For those who just want easy life, get this XT. If you want more, get a 28-105 IS ($409.99) or even the non IS one ($230). Must be better than any advanced point and shot, even with the stock lens.
Of course, you need to have some photography knowledge and experience to take decent photographs.