For $1,000, you should be able to come close to getting the XTi and the
Tamron 17-50mm f/2.8, as long as you do not need any additional accessories, such as Compact Flash cards, camera bag, etc. If that stretches your budget a little too far, then the
Sigma 17-70mm f/2.8-4.5 that I own is not a bad starter lens. It has decent image quality and a good focal range. It's downsides are it's not a constant f/2.8 throughout the focal range, and it's auto focus will hunt sometimes in lower light. You will probably eventually want to upgrade to something better, though. I upgraded to the
Canon 17-55 f/2.8 IS, but this lens will cost you about $1,000 with the lens hood. I went with the Canon over the Tamron because of the image stabilization and better auto-focus motor (plus I decided not to compromise with the lens that will be on my camera probably 80% of the time), but the Tamron's image quality is comparable for about half the price.
For extra batteries, I usually buy 3rd party instead of Canon, since they work just as well and are a lot less expensive. Sterlingtek.com is an excellent site for batteries -- their Canon Rebel batteries are about $15, vs. $60 for a Canon-brand battery.
I do agree with John that the kit lens will not be of high quality. It's only advantage is it's very inexpensive when purchased with the camera, so there is little financial risk, and it gives you something to use until you get used to the camera and figure out what type of lenses you really need. You will outgrow the kit lens very quickly, though.
One other thing you'll want to work into your kit eventually is an external flash. Even a f/2.8 lens will not be fast enough in many indoor situations, so you'll need a flash at times. The built-in flash will not give you very good results -- it's underpowered, and will only provide direct light. I own a Canon Speedlite 430EX ($230) that I'm very happy with. I can bounce the flash, and it has more than enough power for my limited flash needs.