I don't recall ever specifically NOT recommending a camera's kit lens. The 28-90 that came with my 35mm Rebel and the 17-55 that came with my 300D are both decent, usable lenses. They're not L-series glass by any stretch, but for what are essentially $100 lenses, there's nothing wrong with them.
They're getting better as well - the XSi's kit lens is an 18-55 with IS, and it's only $100 more for the package (at least at Kerrisdale cameras, $979 with vs. $879 for just the body). And keep in mind, these are Canon bundles, not exclusive to big-box stores. Some stores may sell other "packages" of their own with additional lenses.
If you're wanting to spend the money for a BETTER lens in that same range (say, something like the Canon EF-S 17-55 IS USM f/2.8 at $1200) then there's no need to get the kit lens, but for a starter, there's certainly nothing wrong with the kit lenses.
Edit: oh, and as for price difference: the XSi body is only $230 more than XTi, according to Kerrisdale Cameras' website (
http://tinyurl.com/5nuy94) and that bumps you from a 10MP to a 12MP as well. The XSi also uses SD cards vs. the XTi's CF, if that makes any difference to you.
Check here:
http://www.dpreview.com/reviews/comp...s450d&show=all