I was in a similar situation several years ago and went with the 40D and 17-55 IS. There was no 7D back then, but I am glad that I decided to start with a 40D. It is plenty of camera. The 17-55 IS was awesome, but it was kind of overkill and not exactly what I wanted. I ended up selling it and went with mostly primes instead. I picked up a Tamron 17-50 (similar IQ to the 17-55 without IS) for less than half the price for similar walk around needs.
If I was you, I would spend less money on the body. Put the extra money towards a couple of lenses and a flash. Maybe pick up a macro lens, telephoto zoom lens, or an Ultra Wide Angle lens in addition to whatever general purpose zoom you pick.
What do you plan on shooting? Kids, travel, sports, architecture, wildlife, bar/club, something else?