At this stage in the digital game, noise reduction is generally destructive. As someone mentioned a few posts back more noise reduction generally means loss of detail. Canon's noise reduction is more aggressive than Nikon's by default. They "blur" it more to "look" like less noise but they are taking out detail as well.
I am also of the camp that Nikon's noise "looks" more "natural" or "film-like" than Canon's and is therefore more appealing to me with less processing than Canon's (and perhaps why Nikon is less aggressive in their default NR, leaving more detail).
As far as
current generation technology from either company goes, I disagree that Canon has better NR than Nikon right now ("better" being subjective anyway). From the images I have seen posted from each camp, Nikon's current bodies are producing much more appealing images at high ISOs to my eye.
xsi to D80, the D80 is probably noisier, though again I prefer the look of Nikon's noise and there are a number of other features which make the D80 a tempting purchase against the xsi including the ~$200 price difference you could put toward better low light glass which would neutralize or even enhance the D80's noise performance versus the xsi. Tough call though. Among other features you could compare, the D80 can act as a commander for external flashes while the xsi can not to my knowledge (though the original poster apparently has no need for this),
Regarding...
The Canon photos definitely seem more aggressive in the NR than the Nikons and are losing some detail, though I don't think it would be noticeable in print here and it would be subjective to try and point out. What is especially evident though is that the Canon is clearly suffering from fairly strong blooming problems. Note especially the edges of the white text on the black boxes in comparison to the Nikon photos. This blooming is evident in several other areas of the photos. I don't know if this is related to Canon's NR process or something else altogether.
I use Nikon cameras, but I am not saying "just buy a Nikon". As others say, play with both in your hands and see what feels best, what makes the most sense to operate, what YOU value in the feature sets, etc. I am merely elucidating some misconceptions.
Take care
Jesse Widener
Art and Structure design studio