In the broadest sense, the higher up the range you go, the more durable, and the more "custom" you can set the cameras up. Things like the material that the camera body is made out of and the shutter improve as you go up the line. They also add a great deal of custom functions that allow you to customize the camera for your purposes and situations. Many of these features are things that professionals will demand and require because they shoot the same thing over and over and they want the highest possible performance.
Another big difference is the actual sensor size. As you move up the range, even from a point and shoot to an entry level DSLR, and finally to a professional or at least more expensive body - the sensor will become larger. This allows for the pixel density, or amount of pixels squeezed into the chip to be less per inch. What this means in real terms, is better high ISO or noise performance in low light(or any light really). So if you love taking shots indoors without a flash especially of moving subjects, and dislike noise or grain then a higher end body will allow you to do this.
As far as spending more money on the body or on the lenses, I always recommend spending and or saving your money to buy lenses. Camera bodies change frequently with technology, and lenses are typically a much better long term investment.
As far as lenses, Canon DSLRs either use EF lenses or EF-S and EF lenses. The EF-S lenses are only compatible with the crop sensor cameras such as the 60D, 7D, 550D/T2i, etc. Where as EF lenses are compatible with all current cameras. You will want to look into the differences between the lenses once you decide on a camera, but before purchasing lenses.
Sorry if the above is too high level, I left out many, many details, but on purpose.