Going from xsi to 40D

I've had the xsi for about 3 years now and I do love what this camera has done for me and I would keep it as a backup but I'm looking to upgrade and I'm on a very tight budget. A friend has a 40D he would sell for $500 now I've also considered the T3i as well would the 40d be a real upgrade from the xsi or should I go for the t3i?
Thanks
Steve

How much is the T3i?
A 40D is a bit of a downgrade in some areas. All you're really getting is slightly better focus, better viewfinder and slightly better burst speed.

Take that $500 and spend it on a 50D or 60D instead.

I agree, the 40D is just a lateral move from the XSi and for $500 isn't worth it. T3i would be a nice step up, or the 60d if you can afford it.

Sort of depends; do you like the size and control scheme of the Rebel series? The aside from the things the above posters mention, you get the larger frame and much better/easier to use controls on the xxD series cameras. I do agree XTi > 40D is more of a lateral move with a few perks.

If you're happy and comfortable with the T3i, I guess I'd go that route for an upgrade in features...I personally don't get why Canon makes things so much harder to operate on the lower "grade" camera bodies, though.