Hi Mike,
Make sure you have a look at the current $400 cashback deal on the 350D + 17-85mm Image stabilised lens. For example at photocontinental they sell this camera + lens for $2199 - $400 cashback = $1799. You might get a better price than this as well, although you have to make sure it is an Australian source camera + lens.
There are also other lens + camera cashback deals available, see:
http://www1.canon.com.au/eosoffer/default.asp?cid=103
The 17-85 is a solid good quality lens, USM (eg silent + fast) focusing, good zoom range plus has image stabilization. Worth the extra $200 I reckon.
Terry