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The camera apparently comes standard with a pretty average lense – so what is the recommended lense to buy with this camera ?
I'd ignore Panacea's 28-200. For one thing, it's NOT an all-in-one lens. 28mm on a 1.6 crop sensor won't give you much in the way of wide-angle. For another thing, $360 for a lens with that zoom range simply won't deliver great image quality. You'd be better off sticking with the kit lens and a budget 70-200mm. Or the Sigma 18-200mm for $280 – also a mediocre lens, but at least it gives you wide-angle.
If you want to upgrade, look at the Canon 17-85mm. At $510, t's the best standard zoom you can get for under a grand. And if you have more than $1000 to spend, look at the 17-55mm or any of the L-lenses.
If you're still deciding on the Rebel 400D and $510 seems like too much for a standard zoom, I highly recommend you economize on the body and get the 350D instead. The 350D + 17-85mm will take better pictures than the 400D + 18-55mm. I promise.
Added at 18:15 GMT:
Just popped back to read the third answer. With regard to Panacea's added comments (man, this is getting tedious) 28mm on a 1.6 crop gives you 45mm effectively. So let me rephrase my opinion… the 28-200 won't provide ANY wide-angle coverage. And testing the difference in a shop – indoors – would be the perfect thing to do.
Of course, I might be biased… I use a 17-55mm lens myself 90% of the time (on a Nikon D200 with a 1.5 crop.)
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Description: Image resolution up to 3888 x 2592 CMOS Sensor with DiG!C II Image Processor Picture Style settings for a broad range of control over color, contrast and sharpening Super-fast 3fps shooting speed with 27-frame burst and 0.2 second start-up time High precision, wide area 9-point