John
I have got the 70-200 F4L IS and it is a great lens - but that completely blows your budget.
I have replaced my 18-55 kit lens that I got with the 400D with the Canon 17-85IS. While this is not the best lens going around it does have some advantages and might fill part of your requirements. It is a discernable jump up from the kit lens (which in the right conditions is not too shabby itself) and I have found the slightly greater reach is really handy for this as a walk around lens. It is on my camera 80 percent of the time. The lens does have some reported warts - particularly barrel distortion and CA in the wide end (although I have yet to really notice this as an issue) but this can easily be rectified within many popular post processing software. I got mine for a tad over $500AUS second hand off Astromart with UV filter and canon lens hood.
I also have the "plastic fantastic" 50mm 1.8 II. At around $130 this is an essential in the kit bag and the sharpness for the price is quite amazing.
I haven't used any super zooms such as the 18-200, but I am sure I have read a review somewhere that discussed through comparisons with other lenses variation in the performance across the zoom range going from good to bad and back to good, but don't quote me on it.
good luck with the shopping
