I will suggest you going with Canon T2i because the Nikon's camera you have selected has very few range of lenses.
The camera is very small and light. It is not weather-sealed or as durable as some of the more expensive SLRs, but it doesn't "feel cheap" in my opinion. It features a 3-inch LCD (compared to the Rebel XS's 2.5 inch screen), which also has a very high resolution. It looks lovely! Auto-focus is fast, and I've been very pleased with the quality of the pictures and videos I've taken so far.
VIDEO: Some people have disparagingly said that Video on DSLRs is just a gimmick. I disagree. Based on sample clips I'd seen on YouTube, I was excited about getting an HDSLR, and while videos are sometimes shaky if you don't have very steady hands, a tripod eliminates those concerns. Audio quality on the T1i was criticized by many, but the T2i has a microphone input jack, which allows you to connect a mic. I don't yet own one so can't comment on that feature, but will update this review if and when I save enough to try this feature out. Additionally, this offers improved recording options, including higher fps (frames per second) than the T1i, which technically offered "true HD" recording of 1080, but only at a choppy 20 fps.
LOW-LIGHT PERFORMANCE: I am much more impressed than I expected. My Rebel XS could go up to ISO 1600, but would perform pretty poorly there. This not only can go up to a significantly higher ISO level, but performs much better. Less image noise means you have to waste less time editing your pics, and many more keepers!