To answer your first question, on Canons, the camera just knows what the maximum f-stop is. For example, on my 24-70 f/2.8, if I try to spin the control dial to set an aperture wider than f/2.8, nothing happens. With my 50mm f/1.8, same thing. If I try to go down to f/1.6 or something, nothing happens. If I spin the control dial the other way, up we go to 2.0.
As for the XT vrs XTi choice, what is your overall budget. That's an important part of your decision. I chose to get the XTi over the XT and over the Nikon D50 while getting a Canon 50mm f/1.8 ($70) and a Tokina 19-35 f/3.5-4.5 ($130), filters to protect those lenses ($50?, how I was raised), and a 1GB memory card (now like $20). I also had access to a free hand-me-down Tamron 70-210 f/4.5-5.6. So that was about $300 over the price of the camera alone, including shipping, for my starter kit.
I've since added a camera bag and another 1GB card (another $70 or so), a Bogen/Manfrotto tripod ($250 -- overspent on the tripod, but I figured it'd last me decades), a somewhat unexpected lucky find on ebay (Sigma 24-70 f/2.8 with polarizing filter and skylight filter) ($200), and I just ordered a Canon 430EX flash ($230).
I still want another CF card and a battery grip with extra battery. That'll take me well over $2000 for my total cost for gear. It adds up quickly.
So, if you think you're content with what you can afford with the XTi and can wait for later for the things you can't currently afford, get the XTi. If your overall budget is low and you don't plan on getting much else with the next year or so, get the XT. Lenses are more important than the camera, especially in the long run when you've purchased a new camera body (I'm hoping not within 10 years, but I'm an optimist) and the lenses keep going. On the other hand, great lenses tend to be outside of the budget for a lot of people. That's why I bought two lenses that were consistently described as excellent lenses for how cheap they are (the 50mm f/1.8 and the Tokina). Sure the 17-40 f/4 and 50mm f/1.4 are better, but for $900 vrs $200 for the two lenses, weren't an option for me.
Finally, from dpreview, the difference between the XT and XTi
10.1 megapixel CMOS sensor with improved microlens array, fill factor and lower noise (which is a minimal difference in most practical applications)
EOS Integrated Cleaning System (seems nice to me. No problems with dust so far)
Anti-static coatings on sensor surfaces plus anti-dust materials in the camera body
Separate low pass filter with ultra-sonic vibration
Software based dust mapping / removal
Nine point Auto Focus sensor (same as EOS 30D) with F2.8 support (haven't used the XT, but I doubt this is a huge difference)
Continuous shooting burst up to 27 JPEG and 10 RAW images (vrs 14/4. Not important to me.)
Single large, bright, 2.5" LCD monitor with 160° viewing angles (horizontal and vertical) (I really like the combined back panel. 2.5" vrs 1.8" makes it a lot easier to eyeball your results while shooting and to check your pictures before getting them on a computer.)
New viewfinder view includes 9 AF points as well as EOS 30D style status bar
Picture Styles, larger range of image parameter adjustment (same as EOS 30D)
Improved user interface (haven't used the XT, but reading the reviews on dpreview, the interface looks much nicer on the XTi)
Image magnification available in record review
Histogram available as brightness (Luminance) or RGB (Red, Green, Blue) (makes histogram much easier to interpret)
Three settings for long exposure noise reduction (adds Auto option) not something I've played with honestly)
Auto rotation with three options (not recorded, record don't rotate, record and rotate) (minimal, but nice)
Additional custom functions (magnified view in record review, LCD display at power on)
Up to 9999 images per folder on storage card
Automatic storage of setting adjustments (no longer requires a press of the SET button)
Improved print / share / direct print features