Hi Pete,
I agree with kilkil, in that the 2 MP extra doesn't make a huge difference.
What would be important to me is the much improved autofocus, the fact that it now has an RGB histogram, and the much improved readability of the screen, especially for settings info...
Other than that a nice new feature is the fact that you can change ISO settings without having to confirm it, although to me that wouldn't be a deal breaker anyway.
The RGB histogram, btw, is better because the luminance diagram available to the XT user doesn't tell you that a single channel has exceeded the maximum available dynamic range, as it is a summation of all three (R, G and

channels. When the luminance levels are still ok, one of the colour channels may actually be clipped already... Very handy IOW.
The sensor cleaning is very handy in that I did noticed some stuff flying around in my XT at times, showing up in the picture. The Canon cmos sensor normally doesn't suffer very much from static, but this is an improvement, as the loose stuff will be kept away from the sensor as much as possible.
If I was starting now with a digital slr rather than a year ago, personally I would buy the XTi, no doubt about that, especially as the price of the cam over here is slightly lower than the price of the XT a year ago!
However, whatever you decide to buy, they are both very good cameras, and if this is your first foray into digital slrs, you will have a lot of fun getting the maximum out of either, and it will also take you quite a bit of time I reckon before you have explored it all...
BTW, if you find the size of the cam awkward because it is so small (I don't, BTW), I suggest you attach the battery grip to it. I have it and I use it for photo sessions. For snapshot use I take it off, so the cam is smaller and more easily carried around.
Anyway, HTH, warm regards, Wim
edit: very silly typos