The flash on the Rebel XT and Rebel XTi appear (from the specs at least) to be identical. They both use E-TTL II, have a guide number of 13, maximum coverage of 17mm focal length, and sync at 200.
What modes were you using on the two cameras? Is it possible that he was shooting in Night Portrait, Manual, or Aperture Priority mode and you weren't?
The basic problem with all on camera flashes, from the built in ones to the really high dollar ones, is that light levels fall off exponentially with distance from the camera. In a typical example, an object 10 feet in from of the camera will get 4 times the illumination of something 20 feet behind the camera. That's because distance from the camera is a single dimension, but the area covered is two dimensional. The result of this is that objects in the foreground of a flash shot receive much more light than the background.
There are several ways to try to combat this problem. With an add-on flash, you can often bounce the light off of the ceiling or a wall. That results in a larger, more diffuse light source and the "fall-off" problem isn't quite as bad.
Another technique is to use less light from the flash and more from the scene itself. This is what happens in Aperture Priority mode. In that mode, the camera will try to expose the background using light from the background itself while still using the flash to illuminate the foreground. It can result in long shutter speeds, so be prepared to use a tripod. If you don't have one, you might try setting the camera to underexpose by one stop and set the flash to overexpose by one stop. The background won't be as bright, but it will still be visible and you'll get a better shutter speed.
his lighting in his pictures were wonderful! Mine look like cr*p!
If you post both photos with the EXIF data intact, someone here can probably do a better job of diagnosing the problem rather than my speculation.
Is there a flash I can buy that will give better results?
An add-on flash is going to do a few things for you. In the Canon line (220EX), the next flash up the line will give you more power. It might also improve your low-light autofocusing. It's cheap and compact.
The next Canon flash (430EX) will give you still more power. It gives you the ability to aim the flash at a wall or ceiling. This allows you to bounce it off of a ceiling indoors. I find this to be invaluable for indoor pictures and wouldn't consider a flash without this capapbility. On the downside, it's rather bulky. It also adds the ability to adjust the power of the flash manually.
The next Canon flash (580EX) will give you still more power. It adds the ability to control other flashes if you ever wanted to use more than one flash in a shot. It's even bulkier than the 430EX.
The numbers represent a rough approximation of the distance that the flash is good for when shooting at 28mm. The on-camera flash for the Rebel XT is a 13 meter flash. The 220EX is a 22 meter flash. The 430EX is a 43 meter flash. The 580EX is a 58 meter flash. The 430EX and the 580EX can also zoom so that more of their flash power is concentrated on illuminating things that will be in the picture. I'm not sure if the built-in or the 220 do the same.
There are also some good 3rd party flashes, but I don't know that market very well. If you want a really good flash and your budget is tight, I would definitely look at the 3rd party flashes.
(no the camera is not focused on the object in front either)
) ....so know i want the bounce ability but the diffusers( which i am guessing would help control the light given off...)which would be the most useful and in what applications. thanks
I made my own out of cardboard, gaffer's tape, and fabric I found in a clearance bin. I have to refine it a bit though...it looks so ugly, it scares everybody when I approach to take a photo. 
Sometimes you have no choice though. 
