Making a choice is often difficult. But if you have your mind on the Canon Rebel XTi, then go for it. And if you have extra spare change, then consider upgrading to a 30D. If you're interested in my rambling, then read on.
Everyone has his/her bias. So let me give you my bias. The main advantage of D-SLR over PS cameras is the wide array of special lenses of D-SLR. If you use a cheap slow lens (like most of the kit lens), your pictures are probably not that much different from a good PS camera. However, PS cameras are no match to D-SLR when it comes to macro, low light, sports, wild life, and portrait (with bokeh effect) photography. But all these require some special lens, eg. macro lens, lens with wide aperture, etc. These lenses can cost more than an entry/mid range DSLR camera body.
I think your choice of D-SLR system should be based on your need and budget. Most camera bodies perform quite well. The performance difference of the camera bodies should not affect your photography as much as your own skill. As long as you pick the right lens and accessories, you should still enjoy great photos.
If you are on a budget, Pentax and Sony will probably save you a lot of money on lenses, since their camera bodies have built-in shake reduction, so you won't need to spend extra money on lenses with image stabilization (which on the average cost $500-600 extra per lens). In that case, you can take advantage of the cheaper but good 3rd party lens and save even more. Unless you bring the tripod everywhere you go, image stabilization is a very important feature to have. It will save your day in low light or slower shutter speed situations.
If budget is not a problem or if you won't mind saving up to buy the best quality equipment, then Canon and Nikon are probably your best bet. From a nonprofessional (like myself) point of view, I think zoom lens is much more fun to use than prime lens. But zoom lenses usually have lower image quality and cost more, with some exceptions. I'm a Canon user, so I'm going to talk about Canon, and the Nikon fans can give you their opinions. For Canon, the Rebel XTi is a very good entry level camera (30D is better if budget allows). If you are not planning on getting the full frame body in the future, then the EF-S 17-55 mm f/2.8 IS is the best general purpose and wide angle lens. If you may get a full frame body one day, then get the EF 24-70 mm f/2.8L or EF 24-105 mm f/4.0L IS for a general purpose lens (but you won't have wide angle on the XTi or 30D). And for mid-range tele, the EF 70-200 mm f/2.8L IS is the best (followed by EF 70-200 mm f/4.0L IS). These 2 lenses (EF-S 17-55 mm f/2.8 IS and EF 70-200 mm f/2.8L IS) cover almost everything that I need, and I will use them on all future camera bodies until they break down. These 2 lenses initially may look like they cost a lot but they're worth every penny, especially when I see what they can do (something that no PS camera can accomplish). The other 2 lenses that I may get in the future for occasional use include a macro lens (when I start doing macro) and the EF 100-400 mm f/4.5-5.6L IS (for wild life at a distance/bird photography).
There are some good quality and reasonably priced Canon/Nikon prime lens, or 3rd party lens. I haven't used them and will let someone else talk about them. But as I said, the prime lenses are not as fun to use, and the 3rd party lenses don't match up to the Canon/Nikon.
Yes, photography is not an inexpensive hobby. But there are a lot of other hobbies that cost more. Besides, this is something fun that I can do with my family and friends. It has recorded beautiful precious memories that I will cherish for years to come. And it also adds fun to my other hobbies like scuba diving, now I can share with others my encounter with a shark in a cave. That is priceless. So go and get your camera and start having fun with it.