It's almost $600 versus somewhere around $850. About a $250 difference. That's getting close to enough for a f/1.4 lens. The XSi isn't as old as I had thought (2008) but it seems to use older components (i.e. Digic III - the Digic IV and supporting components in the T2i let it shoot 3.7 frames per second, compared to the XSi's 3.5, 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). 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, some of which are very good and generally seem to only lose out on low-light performance. Buying a big DSLR when you aren't going to switch lenses - just going to use some image stabilized kit lens with a relatively small maximum aperture and small zoom range - doesn't seem to me to give much advantage over buying a compact with all the same points in a smaller package, in most situations. There is also a difference of some years between the release of the different cameras - so it's up to you. At the very least, if you go with the older camera you would want to download updated versions of the camera software (if you use Digital Photo Professional) from Canon's website, if you get old copies on the provided resource discs (seems likely).
For me, the biggest consideration after price is the screen on the back. The T2i has a nice modern screen with 1,040,000 "dots" on the back, which is slightly better than VGA resolution, or 640x480. The XSi has a screen with 230,000 "dots" on the back, which is a quarter the resolution of VGA, at 320x240. I have used the screen on a Nikon D3000, which is also 230,000 "dots." 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. That is not good. (The Nikon is even worse because of the ugly screen elements they use, like big distracting fake B&W liquid crystal seven segment display digits like you'd see on an old wristwatch, instead of the nicer round font of the new Canon cameras...but you weren't asking about a Nikon camera.)
In my view, the 920K dots of the 50D, T1i, and newer cameras is "sharp enough" for composing many images in Live View. The 5x and 10x magnification allows precise focus to be made easily, even handheld, even using a tilt-shift / perspective control lens. I would not have fun doing this using a screen with only 320x240 resolution. 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.
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.
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. You'll waste less hard drive space on XSi RAW files than on the T1i. JPEGs shouldn't be a problem for either. But you also lose a lot of actual detail going with the XSi, assuming you have a lens and subjects which you can resolve that finely (which also depends on your focusing technique), which of course can double your investment. If you're going to stick with kit lenses and not try to take any nature photos you want blown up into big prints, the XSi ought to be fine, I would think. None of these cameras (besides the 7D) are ready for sports, though the T2i does have newer metering than the XSi, which may lead to nicer-looking, more balanced pictures without any extra effort on your part.
Tangent: Canon (and Nikon) apparently calculates the "dots" resolution of their LCD screens by taking the number of pixels, multiplying by three (each pixel has a red, green, and blue component, or "dot"), so you can get the number of actual pixels and guess at the resolution by dividing by three first. Canon says the 7D has "VGA" resolution, which is approximately 640x480, or like a DOS / Windows 95 PC. The T2i's screen has a different aspect ratio, more like a movie screen's, of 3 long by 2 high (instead of 4:3), and is slightly higher resolution than the T1i / 7D - overall you should get a small, but not really deal-making, bump in usable resolution, because not only are there more pixels, but more of them can be used to show the image (on the 4:3 ratio camera screens, there's black bars).