My thoughts from using both cameras in the past and I presently own a 40D.
I found that the extra dial on the 40D is a god-send when I have to change settings on the fly. The 6.5 fps is great when taking lots of sports action shots. It came in handy while shooting a marathon last Thanksgiving Day. That being said, MOST consumers or beginning SLR folks will most likely not even use that much speed. I shoot in RAW 80% of the time and found the 40D buffer size to be bigger than the XTi. Granted, most folks won't notice this difference, but I do when I'm shooting lots of shots of my daughter during a ballet class. The Elan 7 has the buttons similar to the XTi on the back to make your selections. I think moving to the 40D's dial system will open up a few avenues in your shots.
The XTi in my hands felt too small and uncomfortable to hold. This can be solved by purchasing the extra battery grip to add more heft and that extra vertical shutter button. The 40D felt pefect in my hands and I still haven't decided on whether I want the Battery Grip for it yet.
If you are already proficient with a film SLR, I think a 40D would suit you better. Both cameras, typical of most DSLR's have a steep learning curve for those coming from the P&S world. You mentioned that you have an Elan with a few Canon lenses already, so you've got a slight skill advantage. The Elan 7 has 4fps already, so going to the 40D would actually be an upgrade for you

For low light shots (you mentioned that you have a 100 f/2.8 -- great lens!) the 40D will better suit you with the ability to go up to ISO 3200.
For many people starting off with their first DSLR, I would usually recommend the XTi and save money for better glass. Since it sounds like you already have some nice glass, then, you can spend the money to upgrade to a better body.
Keep in mind that both bodies are crop sensor bodies, so they use Canon's EF-S lense system AS WELL AS the entire EF line. So you can use all your "old" Elan 7 EF glass for either camera.
Good luck with your choice
