What lens should I purchase to go with the Canon Rebel XT?

Question: What lens should I purchase to go with the Canon Rebel XT?
The Rebel XT is going to be my first dSLR. What is the best choice for a lens to use instead of the kit lens? I'm looking for something reasonably priced, but of better quality than the kit lens. I would say I'm more interested in portraits than landscapes. Also, is image stabilization in a lens very expensive, and is it worth the extra money? Thank you very much for your help!

Answer from Brenda: Another contender to compare against the 50mm is the Canon 35mm f/2.0 lens. It's built more solidly than the 50mm and also gives slightly sharper results (although I don't have any complaints about image quality on the 50mm, the 35 is a little better). Also, it may be more flexible in terms of focal length. The 50mm will get you some good close-up face/ head/ shoulders portraits, but may not be wide enough for general use whereas the 35mm (times the 1.6x of the camera body) equals 56mm, which is awfully close to a 'general' field of view and should yield good results under typical daily conditions.
If you can play with both before you buy, do so. I think one or the other will suit your needs.