Thanks for the comments guys, I have a 1000d but am still getting to know it. I'm just tempted to sell all the dsl kit and go for a simple point and shoot as the learning curve is getting me down a bit. Every day it seems there is a new type of camera coming out, I thought a dslr was the ultimate when I started but I'm not sure now.
It's a 2 sided coin really.
There's ALWAYS going to be new cameras with more features, etc being released. That's just life. What it doesn't do is make your camera any less capable than it was the day you bought it.
In a nutshell, a DSLR is the ultimate, but yours is in the entry level so it's obviously not going to be on a par with pro-style kit. There's still nothing wrong with it though. I, and no doubt many on here will have, bought a 350D a few years ago and essentially your camera is essentially better than that.
I was upgrading from a Sony P200 & a Canon S3iS to it and it took months for me to get a single photo that I could say was better than what I was taking on either of the other two cameras. During this time I'd carry around both the S3 & 350D so that I would at least have a handful of shots I could print out. At one point I was probably at the same low that you were and the 350D ended up back in the box for a long while. It came out occasionally and gradually bits and bobs started to click and it's all just carried on from there.
Why did you go for a DSLR? What are you shooting with it?
I'd agree with others and say PERSEVERE! Play with it, shoot random stuff just to get the hang of it. If you save it and your practice happens when you're taking photo's that you really want/need to come out right, it can be very disheartening. Pick up a few magazines or books and learn the basics. It won't take long to fall into place, it's the getting better and better that takes time.