Yes, the Rebel series are entry-level cameras. The build quality isn't the best, as you've pointed out, but they're exceptionally capable cameras. I have a 5D, and I still use my XT from time to time.

Also, the Canon Rebel XTi, and the newer Rebel XSi cost below $1000, with the older Rebel XTi model considerably less. The Canon 30D, which was replaced by the 40D, has substantially better build-quality. Price for the discontinued model is also probably less than $1000, or close anyway. The Rebels are ground-breaking in price/performance, as Patti pointed out, but the 20D/30D/40D prosumer models have the titanium shell body construction.

In a slightly related topic, I've discovered that the Canon Rebel line figures rather prominently in digital astrophotography. Here, the light weight and excellent low-noise imaging performance is quite an advantage for telescope mounting. The combined mass of camera and telescope is better situated for the tracking-mount of the telescope for these very long-exposure applications. Lastly, the low-cost of the Canon Rebel line lends itself to either DIY or professional removal of the infrared moiré filter in the camera, a huge boon to low-light astrophoto applications.