I don't think Edwin has ever actually touched an XSi, so his assessment is a bit off.
....which isn't a big difference until you consider that the T2i is pushing nearly twice the amount of data of the XSi - 18MP versus 10MP).
The XSi has 12.1MP, so the T2i is pushing about 50% more. The biggest difference between the DIGIC III & IV from a user standpoint is the menu system.
If you simply want good picture quality in a cheap package, I think it'd start making more sense to look at the new compact cameras from Canon,
The OP has stated he wants a dslr, so this whole section is superfluous.
This is the same resolution as the second screen on a Nintendo DS, but it feels like using a handheld game system from the early 90s because (at least on the D3000, and I'd bet it's similar on the XSi) there's more space between each pixel on the larger screen. It gives the appearance of a grid, which is distracting.
There is no appearance of a grid whatsoever
on the XSi. None. Zero. There is no space between pixels. The screen on the XSi is perfectly clear and usable.
The XSi has Live View (apparently it was new in that lienup with the model), but again it wouldn't be fun. There is also a consideration in how quickly the screen updates - older cameras tend to have more lag before the image updates, and it might update less frequently as well. The T1i, at least, is pretty quick.
The screen update speed on the XSi was fine, but the ability of the camera to autofocus in Live View was marginal at best. For all practical purposes it was necessary to turn on Live View, frame the subject, turn it off, and then shoot. I may be a big fan of the XSi, but Live View was not a usable feature.
There's also movie mode, which is something else to think about. It's nice to have. Though, on these cameras it's only useful if you are working with professionals on a movie, or you have the chance to set up the camera exactly beforehand. Not good for action or anything with movement; keep a camcorder around.
Really? I realize there are rolling shutter problems in some instances, but so far I haven't encountered any problems with video on my 60D. I assume the T2i would be exactly the same. OP, it is safe to use the T2i for video, really.
There are lots of other minor details to obsess over, if you care to. I haven't seen any direct image output comparisons between the 50D / T1i and the XSi (the XSi seems to have occupied a segment either equal to or just below the T1i, given being 10MP slightly over a year before the T1i's release, while there were 12MP sensors in the interim) but I think the resolution speaks for itself.
Again, the XSi was 12.1MP. The XTi was 10, the XT was 8. It would be a fairly rare image that would actually require higher than 12MP. In over 50k shots over 2.5 years I never needed higher resolution, and I printed as large as 24x36.
OP, look at the features of each camera and see what works best for you at the different price points. Read reviews. I bought my XSi the first day it was available and paid full original list price (I think it was either $900 or $1000). I look back and it was money well spent. At current prices it's an amazing bargain. That said, if I were buying in that class today I'd go for the T2i for the improved low-light performance and the video. But only you can decide what works for you. All three cameras are capable of creating amazing images, any of them would be great first dslrs.