Hi Aaron, welcome to the Cameralabs forums!
Yep, the 350D / XT is still a great camera.
Not sure where you're based, but for UK and USA pricing and reliable suppliers, check the pricegrabber section at the bottom of our EOS 350D / XT review here: http://www.cameralabs.com/reviews/Canon350D/
You can also check out the reputations of other stores at www.resellerratings.com
As for your existing lenses, yes, they'll fit on a 350D / XT or 400D / XTi, but remember their focal lengths will all effectively be multiplied by 1.6 times, so you'll lose your wide angle.
Sure, the Canon kit lens aint great, but its the cheapest way to get decent wide angle and improves the value of the body if you ever sell it. Unless you have some decent lenses or intend to buy a better lens with your DSLR, I'd always advise getting it with the kit lens as it's the cheapest workable solution.