Okay, so I am about to spend anywhere between $2500 and $4000 on a new camera package, but I want to be sure to get the best option for me and am needing some advice.

Basically, I use my camera for taking family shots (ie. portraits, action, everyday, etc.) as well as sometimes for taking portraits of friends/others. I have also really gotten into taking "beauty" shots and source pic shots for PSC. I love architectural stuff, macro shots, and just pretty or unusual shots. Along with this camera purchase, I intend to get a small, pocket-size 10 megapixel camera to have with me at all times, so I could use that for the "everyday" stuff.

Now...here is what I am looking at. I originally had the intention to buy a Canon Digital Rebel xTi, 10.1 megapixel. I can get a kit with 4 canon lenses, flash, memory card, carrying case, etc., for around $1300. However, I have more money to "play" with than I thought I would, so now I am thinking about getting a Canon 5D, 12.7 megapixel. I can get a kit with 1 or 2 Canon lenses, but no flash, for around $3200.

If you were me, what would you do?????

I could get the Rebel and use the other money to build me a faster, better computer, too. Which way do I go??? Any and all advice is much appreciated!!!

What a dilemma.

If you have the money to spend, then get the best camera you can get...something that'll last you for a few years...that way you won't have to worry about "upgrading" any time soon.

The 5D looks pretty sweet!
http://www.dpreview.com/reviews/canoneos5d/

WOW! Lucky you! *drools*

Definitely read up on reviews. DP already linked to my favorite digital camera review site http://www.dpreview.com/ (no relation, I don't think! ). It's important to also research the digicam, not just your main investment camera. A lot of digicams are packing on the megapixels, but so many still wind up with such horrible noise and other image quality issues as to make their photos virtually unusable for anything more than web publishing... So read up to find one with the least objectionable compromises to your standards. I always carry a digicam with me, too, and a lot of my photos aren't nearly as pretty as they could have been... but still any camera I have with me beats the one I left at home.

On the big camera, you may find that its low-light sensitivity and smooth performance despite high ISO will mean you won't need a flash attachment except under nearly pitch black conditions (okay, or strong back-lighting). My brother-in-law almost never uses a flash with his super Canon. (I don't remember what model it is, but he got it about 2 or 3 years ago.) Again, read reviews, both professional and user reviews, and find as many sample images as you can.

On a related note...I rarely use a flash...and I take a LOT of photos.
Although this weekend I took some shots outdoors and used it as a fill light...just to experiment a little.

http://digitalpharaoh.photoblog.com/
The first photo and the 5th and 6th I used flash just to try and bring out the facial features a bit more...and it cut down on some of the harsh shadows.

The portrait of The Boy I'm QUITE pleased with.

Also, my camera's flash is adjustable...I can dial it down so it's not in-your-face bright...but subtle...which is a really neat feature.

I've been through my share of cameras. Here is my advice. Refresh rate is the key. The average memory card holds half a gazillion pictures. I like to take as many pictures as possible good or bad. I'm lucky to get a good one for every 25 shots. Back to refresh rate, My current camera won't let me take more than one every five seconds. There is also a 1-2 second lag between button and shutter. Any camera with minimal lag and the ability to take consecutive shots without a 5 second downtime is a winner in my book. Good Luck.

Canon 5D for the serious camera. A small Canon or Sony in your pocket/purse (read dpreview extensively). I'd steer clear of Pentax Optio - have used 2 different ones, nice looks, horrible quality (noise, weird colors)

ok... I think the smaller cameras don't take RAW images, just a note!
I have great things about the rebel xti, good to great picture quality, the biggest downside is the lightweight body (mostly plastic), and if you are in a crowded place shooting, or climbing and shooting, you may want a more solid body,,, there's also the 30D, which has a stronger body, and I believe slightly better image quality...and of course... the 5D ... if you can get a canon dedicated flash, then that would be superior... you can really manipulate light with a compatible flash!

I am jealous, mine is old now - 20D, and I love it, but I sure wish my pocket book could keep up with technological advances