I had a 350D and got so frustrated with the output I changed to Nikon D80, which I do not regret...however I often go back to my 350D stuff and can now get amazingly better results.
Too late for what you have already taken, but
1 use set to RAW with adobe RGB colour space and all settings at neutral or zero position; get used to choosing aperture and speed in Manual mode, sometimes repeating with 2 or 3 settings (400D probably has auto-bracket to do this for you; set 1EV apart, as RAW allows smaller corrections anyway)
2 that gives you a horrid grey image when you open up, but this is because YOU are going to do the processing, not the internal computer (as someone else has said)
3 canon's free DPP software has some brilliant features in the RAW panels and particularly good cloning, but never touch the RGB panels
4 more normally the best conversion (CR2 to tif) is using DxO optics software, which not only takes canon's in house, but also analyses real results and has brilliant lighting correction
5 for serious photography you then have to go to serious software which allows you to do different things to different parts of the image. Although Photoshop is meant to be the 'industry standard' it is hideously expensive and difficult to use. Adobe's Lightroom is an alternative approach, but I don't use it or know it, because Nikon Capture NX2 does 95% of what PS does for 1/4 of the cost and time input and will take tif or jpg files from any camera. It is often possible to also improve on jpg files converted in camera. Most software has 14 or 30 day free trials.
A very good site for easy learning is
http://www.cambridgeincolour.com [nofollow] which has both tutorials and excellent friendly comment forums. I have an intro gallery to NX2 on my pbase gallery
http://www.pbase.com/crisscross/nx2 [nofollow] (and lots of walking pics in other sections, the 2007 ones from 350D)
The canon 18-55 kit lens I had was excellent, load of rubbish talked about kit lenses being poor. I supplemented it with Sigma 50-150 for walking and would have added 2x converter if I had kept it.