I don't know which lenses Canon has on promotion ATM and it's still hard to suggest lenses without an idea of budget guide lines. As for the camera body, both are a good choice. I have large hands (XL-2XL when I wear gloves) and have no problems with the size of the 350D/XT. I also think the 350D/XT is quite able to do high speed/fast action sports and animals as I shoot some pretty fast birds in-flight and it works fine for me.
The end image quality will be the same from both cameras as they are both 8 megapixels and both use the same internal processor (.2 of a megapixel is nothing). The jog dial/shuttle on the back of the 20D was the main reason I didn't buy it as I hated it but others love it so like many things it comes down to your personal choice.
I have used both cameras and the end results in images were the same, the 20D does have some extra features, are they worth the difference in cash ? If you don't know then I'd say there not worth it to you, for me I didn't see the value. I'd much sooner spend more money on lenses as this is what WILL make a difference in image quality, but if money/budget isn't an issue for you I'd grab the 20D. The thing I liked most about the 20D over the 350D/XT was the slightly brighter view-finder.
Back to lenses, if you give us an idea of what kind of money you plan to invest in glass it would make it alot easier to adivse a little. It's always nice to buy the best and it's good to do this but we all also have limitations so it's better to live within our means. One thing I'll say is I'd get the camera with the kit lens because it may not be the best but it's certainly good value and a good starting point. Stop it down and it works pretty good, also a good idea to get a good flash unit.
As for other lens ideas to look at =
Canon EF 50mm 1.8
Canon EF 85mm 1.8
Tamron SP90 Di 2.8 or Canon macro EF 100 2.8 (a macro lens maybe a good idea also for the product shooting depnding on the size of the objects and something in the 100mm range also makes good for portraits or nature like flowers and insects)
Then for animals it depends on if they are largish or smallish.
For large 300mm is good starting point, I'd look at Sigma's 100-300 or the 120-300, if you thinking birds and smallish or skidish animals you will want at least 400mm as a starting point and then I'd say look at the Canon EF 100-400L, Canon EF 400L 5.6 prime or Sigma's 50-500DG.