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“If you currently own an EOS 450D or another fairly recent entry-level DSLR from an image quality point of view there is not necessarily a need to upgrade to the EOS 500D. However, the HD video mode, new high-resolution screen or extended ISO range make it easier to justify the expense if you’re likely to use these features. For anybody buying their first DSLR the 500D is an easy recommendation but you might want to have a look at the Nikon D5000 as well. It comes with a similar feature set to the 500D (‘only’ 720P video though) and performs slightly better in low light.”
A pretty favorable review.