Well, choosing the right lens is something that can be done only after you get an idea of what kind of photography you might be interested in.
Bear in mind the thumb rule saying that the shorter the lens range is, the better the quality, meaning you'll get better results from a 2 lens combo than with a single lens covering the whole range, especially at the extremes, which tend to produce a bit distorted images.
However, you won't want to switch lenses all the time, so you'll need a good walk around that'll cover the ranges you'll mostly use. I agree that the kit lens (18-55) isn't much of a deal, however it produced some nice shots for me. A good alternative is the Canon 17-85 IS USM which gives you a nice range and good results on the wide end, but a not satisfactory min f number of 4.0 (although the IS mechanism compensates a bit at low light situations). A chepaer and also nice one is the Sigma 17-70. It's a really nice starting walk around, that has a Macro-like feature, and also a great 2.8f number, for low light shooting.
Combine one of those with a nice tele to give some good zooming when needed (you can get the mediocre canon 75-300 USM for a good price just for the start) and see where it leads you.
I'd also go for a Canon 50mm f1.8. A very useful lens for about 70$.
An extra battery pack is a must. I'm doing fine without a grip, but those who have it say they can't live without it, and there are half priced Opteka grips for the 350d, manufactured in the same factory, just without the canon logo.
For further lens recommendations, you better do some reading. A nice place to start looking at models and seeing some examples is here: http://photodoto.com/lens/.
You also have the canon slr lens forum at dpreview here: http://forums.dpreview.com/forums/forum.asp?forum=1029
And some flickr 350d users groups with many discussions on lenses here: Canon Digital Rebel XT , 350D XT users and Canon 300D&350D.
