I have the eos 400D (a rebel), too, so I can share my experience:
I tossed my kit lens after buying Canon 28-135 USM IS - the images are just so much better with it. The drawback is that on a crop camera the field of view is not wide enough for some situations (like in the living room).
So a lens that goes further down is still needed, and if I had 1000euro I would get this one: EF-S 17-55 f/2.8 IS USM - It is a fixed aperture F/2.8 no matter how you zoom.
Notice the "mouse overs" where they compare to the kit lens. You can't believe how bad the kit lens is until you see that.
If you think that focal range is more important than low light shooting then I'd get this lens:
When I got the 28-135mm lens I paired it with Sigma 10-20mm HSM which makes some great wide angle shorts. With group pictures it is best to zoom int to 5-20mm though, or the people on the edges get long faces: