The 350D is capable but it is awfully long in the tooth now and the screen is very small. The noise handling is also pretty shocking by the standards of even the 400D, never-mind the newer cameras.
I take it this is your first purchase in the DSLR world and although the 40D is a really good option you're unlikely to fully utilise it for a while.
Anyway out of the 350D and 1000D it would be the latter for me!