Thanks for all the great replies. I appreciate the fact that people on this forum aren't stuck in some type of 'you must have this body' mindset (which is how Nikon forums tend to be).
I really do love the XSI. It's a no frills camera, but the output as excellent.
I am not your Joe Consumer who just happens to have 2k to blow on a camera (I have friends like this, they buy a D3 and then stick a crop camera 18-55 kit lens on it - more money than brains LOL). I have used pro bodies in the past (crop) and I familiar with their pros and cons.
I think the 50 1.8 is optically excellent, hell wide-open I get stunning shots (when in focus) on my XSI. I would assume it would be even better on FF as the sensor is less demanding than crop.
I like the smaller bodies like the Rebel due to size, but I miss some of the things that I had in a pro body (big viewfinder, comfortable grip, accurate focusing, better meter). I also think FF has benefits I would appreciate: For example my 50 1.8 is a bit long indoors and I prefer the 40-50mm focal length for walk-around shooting. I also tend to be one of those people who love wide-open shooting as I am a bokeh fanatic and love what wide-open does for portraiture. I also suffer from chronic pixel-peeping, one reason the XSI suffices, it's per-pixel detail is superb at base ISO.
I did ponder 550D, but I don't know how much of an upgrade it would be (the lcd is stunning). The meter seems to be better on this model which is a plus. I kinda like the option to shoot movies as we have twins (I don't really care for movies in an SLR, but it's a bonus with a family). I am a bit concerned about the pixel density of the 18 mp sensor, though images do look wonderful from this sensor.
I also thought about the 7D, it's a hell of a body for the price especially when it's a $1000k less than the Mark II, but I wonder if the 7D would still leave me desiring full frame ?
Yes I have considered the 5D classic, but my concerns about this camera are mostly related to reliability. This camera definitely seems to suffer from a high degree of mirror failure and a $1000 is a lot to drop on a camera with 'unknowns', especially when I can pick up a 7D brand new.