i got a 350 before christmas and it's great!! I didn't bother with the standard kit lense, mainly because it's a little too short for what i use most, so i got body only and then bought a 28-105 f3.5 USM off ebay - makes a great all-round camera if you don't do much wide angle work.
The 18-55mm kit lens is ok, it's not the best by any stretch but is ok, but when you've experienced the better ones you will see why . Cossiebros has the "L" series lenses which are the daddies, but they will make a serious dent in your piggy bank.
If you can cope with carting it round, Digital SLR is just soo much better than compact, both from the flexibility of settings and the benefit of decent (and changeable) optics.. in anything but ideal light conditions the SLR is way ahead.