Canon DSLR Set options?

On the whole I would advise going for the better body because, while lenses are not cheap, you can more easily save for a new/better lens later. Unless you are particularly interested in landscape or architecture photography, it is unlikely that you would really need the extra wide angle of the 17 - 70 lens, and you probably would not find yourself restricted by the 28 - 70 lens. Wide angle settings inevitably introduce distortion (though they are now much more acceptable than they were and digital techniques can do a great deal to correct it). Apart from the difference in zoom range, the two lenses are probably practically identical in quality.

My rule of thumb is always buy the most lens you can. When it comes down to it in the end, the camera body is only the controller for the aperture and shutter. The lens makes the image. As for 17MM if you are one to do a lot of indoor shooting, or like the creativity of a wide angle, then that is the way I would go. You are likely to get a bit sharper high end 2.8 with the 28-70, but having that almost extra 10 mm is a nice option. This really comes down to your shooting style and taste. For me personally, I jut made a decision between the Canon 40D and 50D, and the 50D didn't have enough options to justify the difference in cost. The few bells and whistles it offered were nice, but not really a "must have" and I too opted to get an extra lens instead of the next newer body model.

You might want to look at the Canon Rebel T2i which has been compared to the Canon 50D. You may be able to purchase the camera with a 2 lens kit for less than the cost of the D50 with one lens. The kit lens are much better than even 10 years ago. Doing this you get a camera with the latest technology with out the cost and you get two lens that cover what most people need.