I have the 17-40 and i used to own the 17-85 (got it with my 20D). I sold the 17-85 because i didnt use it enough, but now I regret it because it's really a very nice and versatile zoom and I dont think the distortion that people talk about is a real concern except maybe for test shots (never was for me anyway).
Im going on a trip to Rome in the end of february and i would like a wide lense for indoor use. I will not be able to bring a mono- or tripod so all will be handheld. The 17-40 is just to slow for most indoors use without flash or pod but the IS would be perfect for this. I know the 17-85 is kinda slow but the IS is very effective for non moving subjects.
If there is not to much distance to your subject i think its hard to tell the 17-40 from 17-85. On greater subject distance the difference in contrast becomes clearer.
I guess what im trying to say is, it all depends on what your needs are. If shooting mostly outdoors and wide go for the 17-40. If you need a versatile allround lense that covers most situations go for the 17-85, you wont be able to see any difference in 90% of the shots anyway.
Dont get me wrong, i love my 17-40 - but i should never have parted with my 17-85.
And remember, in the end its all subjective anyway 