I made that exact upgrade, but I did it well over a year ago and I managed to snag it new for $829. One of the reasons I upgraded was for the video capabilities. I understood that it didn't have autofocus, but I didn't realize how much that would impact the functionality of the video for someone just looking to take some casual videos. If you've never used manual focus for video before you should know that it is NOT easy to use. If that's your main motivation for picking up the 60D, the money would be better spent on a real video camera if you value autofocus. Personally, I only use video on my 60D in a pinch. I've since purchased an HD video camera for every day use.
As for the ISO, there's definitely an improvement there - no question about it. I too was wary of anything over 800 with the XSi and normally kept it at 400. However with the 60D I normally have mine set to a max of 1600 and then just select "auto" and let the camera pick whatever it wants while I'm in aperture priority mode. I've never been disappointed with the noise at those settings. I have used it at 3200 and it's definitely useable there too. I just rarely need that kind of low light performance so I stick with 1600 or less to keep noise down.
The other two main reasons I upgraded were that I really wanted the variangle screen (I use it about 20% of the time) and I wanted the additional MP's. The variangle screen is so incredibly helpful for unusual angles. I took this uncropped picture, for instance, with the camera on the ground and the screen flipped out, I used the 10x magnification (which you could use on the XSi but the angle to see the screen would be terrible and you might not nail the focus) and my 60mm macro and I really like this pic. (click the pic to enlarge to 2000 pixels wide)
Here's another - same scenario
So, the screen alone was worth the upgrade for me to get pics like this. I would have been MUCH LESS likely to get these pics with the XSi.
Depending on your shooting style and your thoughts on the video/autofocusing, it might be worth it to you to wait for the next generation of this line as my guess is that it'll include full-time autofocusing in video mode. I'd probably expect at least some improvement in ISO as well. If not, there's always Nikon for full time auto focusing in video - or again, a dedicated video camera.