I'm Groucho.
I do shoot Pentax and am extremely happy with it, but I consider Mark a friend as well as other users of other systems - it's just hardware, it's the photographer that takes the photo!

Most DSLRs produce very similar-quality photos, it's really up to the lens more than the body. You'd need to do some real pixel-peeping to see the difference in a photo taken with any extra-level or mid-level DSLR out there.
In terms of "starter" camera, I think the K100D actually offers more than the XTi. The XTi's advantages are that it has more megapixels (really not that important IMHO) and that it has a larger buffer, so it can take more shots in a row. (OK, it has dust reduction too, but a Rocket Blower is still going to be a good investment as none of the built-in systems are very effective.) The Pentax offers more controls (like spot metering), a top LCD, image stabilization with every lens, compatibility with every Pentax-mount lens ever made, etc, etc. It has 11-pt autofocus vs 9-pt in the Canon (probably little difference in real-world usage). Also important, the kit lens in the Pentax is pretty clearly superior to the Canon kit lens, in construction and optics. It also has a non-rotating front element, which is helpful when using a filter that you rotate manually (like a circular polarizer.)
This doesn't mean that the Canon is a bad camera at all (and capable of taking good photos with the kit lens), but I certainly wouldn't think that you're getting a less-functional camera for the price. Canon is a very famous name and many people will buy their stuff just because of the name on the front (as many people admit here), Pentax is a smaller company so they have to compete on features and price. This is a great situation for the consumer as it gives them the option to pick up a fantastic DSLR for an amazing price (just under $400 after rebate.) A Canon S5 is not much cheaper but isn't going to give you nearly the image quality (though it is smaller and takes movies.)
Good luck, I can almost guarantee that you'll be very happy no matter which one you choose!
