Gramps has a point. Both cameras are coming down in price lately. You can get the 20D for $1,200 with the 18-55 kit lens on amazon.com right now. Since you didn't mention a flash unit, add the $100 memory card and you get a better camera going over budget by $100.
On the other hand, for $1,300 you could get the Digital Rebel XT with the better, EF-S 17-85mm f/4 USM IS lens (what I bought, and what I'd prefer to the 20D with the 18-55 non-IS lens).
If your budget is really firm, though, and you want something useful right from the start, the first sugestion is a good one. You're going to want a separate flash, you have to buy a memory card, and you ought to buy a case of some sort.