jmann,
I strongly second the 50mm f/1.8 lens -- fast and sharp (but set it at higher than 1.8). Like was previously suggested, 5.6 might be good.
I'd be cautious about using a flash in this situation, because you don't want to be intrusive in a private moment, but still you might come prepared in case there is a posed portrait.
For anything other than tripod work, you will need a high ISO if you don't use a flash. This will allow you to get a decent shutter speed for up-close hand-held shots. The problem is that at high ISO settings, such as 800-1600, the XTi will show noise. I always shoot in RAW, but I don't have an XTi. My daughter does though, and she shoots in RAW+jpeg. I noticed that the XTi has quite good noise processing in-camera for jpegs, giving pretty good results even with ISO 1600, so, take a deep breath, in your situation I would suggest shooting in RAW+jpeg (RAW so that if you see a great pic that you want to get the most out of you can, but you would have to do your own noise removal as well as other adjustments that the camera does for jpegs).
The key is a high enough ISO so that you can hand-hold shots without camera shake causing blurs and without moving people causing blurs. If you can use a flash that would help with these things but it would tend to darken the background if you used the fastest shutter speed. To get the most of the ambient lighting of a church you would want to use either no flash, or fill flash while still exposing the background lighting. This is tricky, and still calls for the higher ISO and wider aperture (lower f-number).
This all might be confusing if this is your first "serious" experience with an SLR, but I would take the time to understand these issues. Indoor photography can be tricky, especially when you combine people with an interesting setting, such as a nice church, and want more than just snapshots.
Good luck with your endeavor!
Tony