Julie,
I do most of my shooting with the XT with a Digital Rebel and D30 as my back-up equipment. I like the look of the images out of the XT both in jpeg mode and RAW. They are more "film-like" than most of what I see coming out of digital SLRs these days.

BTW, have you seen the new plug-in being offered by Alien Skin? It simulates the look of various films including the old Kodachrome blue. I have a trial version and it's a gas!

You might tell your friend that having a camera does not mean you are a photographer : )

Jim