I think that if your main concern is the money, then you should go after the Rebel XT; it really is the same sensor, same image processor, main difference is 8 Mpixels vs. 8.2 Mpixels (for the 20D), and the body is smaller (the XT), the XT shutter sounds a little more high-pitched.
The image is really nice off-camera, but not "gorgeous"; just really nice. Very usable images at ISO 1600, and acceptable noise at 3200.
But if you *must* save money, then get a used 10D, or the "original" Digital Rebel. Cleanest ISO 100, 200 and 400 images, cleaner than the 20D at the same sensitivity. Only pixel-peepers like me would notice these differences, though.
I own and use the Canon 17-40L lens a lot, and is wonderful; the cheapest "L" lens (if $750-850 is "cheap"). I also own and use the Tamron 28-75 Xr Di f/2.8 lens a lot, and its only flaw is that it, on very unique conditions, can exhibit internal reflections/flare, which again, if you're somebody who doesn't think that a scratch in the front element or a big bubble in the rear element would affect the quality of your pictures, then this will never be a concern for you; this lens is about $350, and performs very close to the Canon 24-70 L (I've made side to side comparisons, including flare, and I was very surprised), and it's a super steal compared to the $1400+ of the Canon 24-70 L
Since you're also budget conscious, you should get the Canon 50mm f/1.8 MK-II. Loud, made of plastic, not-too-slow to focus. But takes amazingly good pictures (ymmv), and at $60-80 new, trust me, you can't go wrong.
Last, but not least, is the memory card. If getting a 20D, don't think about using anything less than a 512MB card (when you go on a trip, you'll kick yourself if you don't take at least 1GB worth of memory). Lexar is good value for the money; avoid the cheap brands.
The 18-55 kit lens is a crapshoot. I got a good copy. I've seen shots taken with it, and I've seen horrible to very good quality images (I'm talking about the resolution). The quality control on the kit lens, unfortunately, seem to vary wildly; hence the "low" value.