If you are determined to get a canon rebel, get the old one. Use the extra 200 bucks towards a good lense (notice how I say "towards", and not "for").
The advantages of the xt are:
3 fps vs. 2.5 of the old rebel.
start up time, .02 seconds (or something like it) vs. 2 sec of old rebel
has USB 2.0, vs. old rebel's USB 1.1 but you should be using a card reader anyway.
Has E-TTL2
8 mp vs. 6
finally has RAW + JPEG, something the old rebel sadly lacked
(anyone who tries to tell you this is even a medium sized advantage has no idea how a pixel is actually made in a digital camera, and shouldn't be listened to.)
The shot buffer still sucks, it's still only something like 14 frames, whereas the d70 is close to 130 frames.
The d70 is not in the same class as the rebels, it is much more like a 20d than a digital rebel.
WHY I HATE THE REBEL XT
Everything is menu based. When you push a button on the body that does some function like change the ISO, it takes you to the menu.
It is so phricking tiny that my hands don't fit on it. (I used to think my N80 was small)
crappy flash sync, the d70's is 1/500 which is what every camera should have.
Canon switched to a smaller NB-2LH battery. (pretty lame decision in my book)
This is a minor thing, but i hate the squeek the shutter makes, it's a higher pitch than an EOS-1 V and sounds very electronic.
Like I said, If you buy a rebel get the old one, body only for 699, put the money you saved towards a good lense.
KEEP IN MIND. ANY CAMERA CAN MAKE GOOD IMAGES. PHOTOGRAPHY IS ABOUT CONVAYING HOW YOU FEEL ABOUT SOMETHING TO AN AUDIANCE THROUGH A PHOTO. YOU WAIT FOR THE LIGHTING, OR MAKE IT, WHATEVER. THE POINT IS THAT YOU NEED TO GET A CAMERA AND START SHOOTING.