The Canon EOS Rebel XS replaces the XT and XTi with a 10-megapixel sensor, live view to watch the action on the 2.5-inch LCD, and a 7 point auto-focus system. It comes bundled with the EF-S 18-55m f/3.5-3.6 IS with image stabilization and should sell in the XTi price range (about $700). It’s only available in Japan now but expect it to hit the US in July.
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