It doesn't, and there won't be one added via firmware, either. Older compact (with fixed lenses) cameras might have 640x480 resolution video, but the first batch of DSLRs to get [edit] HD resolution video were released in 2008-2009. The XTi is simply too old.
But this might be a good time to check out what new features are available for your camera. Canon has a webpage you can visit to check on new software, firmware, and drivers (et cetera) for the camera, here:
http://www.usa.canon.com/cusa/support/consumer/eos_slr_camera_systems/eos_digital_slr_cameras/digital_rebel_xti
If you got the camera before December 2007 and didn't update the firmware, now might be a good opportunity to do so. I don't see a change log, but I see a couple small new features were added here and there in the firmware updates.
