... much like the OP I wasn't sure about the software required. I mean I have iPhoto 08 but I have no clue how to use the editing tools provided with the exception of "auto adjust." So do I need to move beyond iPhoto? Should I get Aperture? Can Photoshop Elements do everything Aperture can?
Hmmm...maybe we need to put together a FAQ primer/comparisons chart?
Also, the whole photography thing. How do I learn to use the damn camera? Is there any good books for budding photographers? Anywhere to learn the secrets of ISO, aperture and shutter speed? I'm new to the world of DSLRs and I'd like to learn.
I have no idea how I originally learned, but around ten years ago, I was getting ready for an 'expedition' and read one of John Shaw's books that dealt specifically with unusual photography situations. What was a very valuable surprise was that he had a "primer" of sorts chapter in the front of the book (it is essentially repeated in a few more Shaw books I've bought since) ... worth the price IMO.
Regardless of which book you end up with, its a good idea to have your camera and its owner's manual by your side when reading, so that you can pause while reading a chapter, find the relevant controls, go back and read it a second time, etc.
...The camera I'm considering purchasing is the new Canon Rebel XSi but I am completely undecided on the kit lens provided. For a new hobbyist is it necessary to go beyond the kit lens provided at the start? Does it really make that big of a difference? Will I notice the difference?
A definite 'maybe'.
In general, I'm tempted to say to not worry too much about it for an initial SLR, because its usually a bit premature to really say that you've been terminally bitten by the photo bug, and the kit lenses are usually inexpensive, and what can be more important than saving some money is for you to learn what focal length(s) of lens you like to work in. Otherwise, you might drop $1000 for a great {pick something}, but then discover that it collects dust because you don't particularly enjoy taking photos at the {something} focal length.
It has long been said that the difference between an Amateur and a Pro is the size of his trash can. What this is referring to is how critical you are of your own work before you show it to anyone. IMO, this probably has some bearing on how happy/unhappy you'll be with your equipment, as if something's consistantly "not good enough", you'll be rejecting everything, and then shopping for replacements.
The good news here is that the tougher you are on yourself, the more that your family/friends will think that you're a GREAT photographer, even if you have just a $75 Point-n-Shoot. If there's one skill that I'd say that many hobbiests lack, it is the discretion to cull your work before showing it to others.
I searched Indigio (like Amazon books for us Canadians) and found "The Digital Photography Book - Volume One & Two" by Scott Kelly. Apparently these books are highly reported on but I don't know if they walk you through the basics which is what I am hoping for. I further noticed several books that specialize in the specific camera model I am considering purchasing. Jeesh, I just don't know...
FWIW, it sounds to me that you need more of a "basics" book than something specific to your camera model. As such, I'd try any of your local bookstores for copy to flip through (any author), as this will give you a basic idea of what's commonly covered.
In the meantime, for instant gratification and distance learning,
here's the URL to a wonderfully humorous set of primers that were written for the UW-Photo discussion list by the (now late) Underwater Photo Pro Jim Church, which is very affectionately known as "Jim's Cows". To give you an idea of Jim's humor, the final chapter that Roger has online is Part VII:
ALL EXPOSURE METERS ARE MALE
Ladies, let me explain exposure meters in words you will all instinctively understand:
All exposure meters are male:
They won't stop and ask for directions.
They have only one thing on their minds.
If they don't get what they want, they cheat.
(For old hands, this is Jim's introduction into 18% gray)
-hh