If you are going to be shooting dogs, especially Shih Tzus, Yorkies, & Min Pins, you will definitely want a faster lens. Pass on the 75-300. That lens was originally designed for 35mm, and it will also leave a big gap in your focal lengths between 55 & 75mm.
A "fast" lens is one with a large maximum lens opening. The smaller the aperture number, the "faster" the lens is. Also, lenses with a fixed maximum aperture across their zoom range are nearly always better quality than the ones whose apertures vary.
Switch's advice seems good, but the lens he's talking about is around $400. It is an f/2.8 though, even at max. zoom. The lens tests show that it is better than the Canon kit lens. (which isn't bad, by the way)
Having just bought a mint 50mm f/2 lens (manual focusing) for my Pentax K100D, I will recommend that you stick with the XTi body, basic kit lens, and add a new 50mm f/1.8. With the multiplication factor, this will behave like a 80mm f/1.8, and will allow you to get really nice shots of your doglets, even when they are in motion. Alternately, when they are lounging around the house, you can get good shots too. Crank the ISO in your camera body up to 800 or so, go to aperture priority mode at f/1.8, and shoot protraits.
Shortly, I'm going to post some shots of my doglet Floyd, a 1/2 Min Pin and 1/2 Chihuahua. These were taken with the 50mm f/2, a fast portrait lens on my camera.