I bought the famous Nifty Fifty lens (50mm, f1.8) for my old Canon Rebel Digital XT. Believe the hype, it is less than $80 and if you shoot with it wide open you will be amazed how little light you need. I use mine outdoors for great bokeh (those gorgeous out-of-focus backgrounds that look stunning in any image, see my header for an example of bokeh) or inside without a flash. I found that my images inside look better if I don't use my on-camera flash and just turn up my ISO as high as needed (I even shoot at 1600), use a wide aperture (I even shoot at f1.8 with great results) and then remove any noise later with the free version of Noiseware .
No more red-eye, deer-in-the-headlights, shiny skin, black backgrounds, washed out faces and just gorgeous portraits of my little guys inside. Plus the lens becomes 80 mm when on my camera due to the Canon Rebel's 1.6 digital conversion which is an ideal portrait lens and I use it all of the time in my photoshoots. People have said this lens is so light and cheaply made, but I have had no issues with it at all. Just don't throw it against a brick wall and you will be fine. :-)
My other favorite lens that I usually keep on my camera 75% of the time (it is my walk-about lens) is the Canon 28-135mm, f3.5-5.6. It has Image Stabilizer so you can use it in low light quite well and the wide angle to telephoto range is perfect for almost any type of photography. I love this one for photographing children as I can do close-up work, but also capture them as they are running away! It is also amazing for landscapes and basically anything you want to photograph. I seriously love this lens. It has been with me even before I went digital (maybe 6-7 years) and has made several treks to Big Bend National Park, Utah's National Parks, Vegas, Germany, Florida, and the list goes on and it still works flawlessly. It has even been dropped two times! Yes, I am rough on my equipment. ;-)
I also have a kit lens (I NEVER use it) and the Canon 70-200 mm, f4/L which is a professional lens, bullet proof, affordable, and takes stunning images. However, it is pretty big so I use it, but not as often as I would like.
Oh, I am a huge lover of Canon cameras (since my old Canon AE-1). People ask me why I only use a Canon. The reason is quite simple, all of my lenses are Canon so there is no way I can afford to change at this point! I know there are other great cameras out there, but I am already commited and have been very happy with all of my Canon purchases. If you need to get an affordable SLR camera (and everyone needs one!), check out the Canon XSi.
Wow, I just found you can get the Canon 40D (one step up) with my favorite lens! The price listed below is the 40D camera body AND the 28-135mm lens I posted above. This is cheaper than getting the Canon XSi and the lens together. I am shopping for a new camera body (my old XT has been through everything and has a cracked body, but the darn thing still works after almost 20,000 images) and I will have to investigate this camera. My sis would love to have a 28-135mm, maybe we can work out a deal. :-)
And make sure to read Bryan Peterson's Book so you will know how to use it. This is one of the best photography book out there. If you shoot on automatic mode all of the time you don't need a SLR!