Is this a WAY better choice than getting the SP-560?

Greetings!
I have been trying to decide between the Olympus SP-560 and the Rebel XTi. I know they are different cameras but I am coming from Fuji 2650 and Sony DSC-T5 so I am a noob. :-)
I really want the 18x zoom but it seems IQ degrades badly at that range. I also like the 560's panorama assist feature although I dont know if thats so important or not.
After looking around and seeing the IQ on the Rebel I was blown away but how expensive will it be to get the same zoom range with the Rebel that the 560 has?
I am also concerned about the dust issue.
I will mostly be printing 4x6 and some 8x10s and of course whatever panorama shots I can create.
Thanks a lot for any input on this...

For decent IQ with large zoom for just taking pictures for fun and memories you should look at the Olympus SP-560, the Fujifilm S8000 or Panasonic FZ18. The Fujifilm seems to be the best of the three. Now if you want to learn photography seriously, looking for high image quality and you are willing to pay at least 3 times, the Canon, or any DSLR is a good option. A DSLR combined with a 300 mm zoom lens should give you a similar range, but it is very bulky and you will need to be changing lenses many times. They are way better, yes, but is it worth paying so much money for just regular picture snapping? that's up to you.

I think I agree with getting the Olympus for my purpose. One correction though, as per my research the one that has better optics is the Panasonic. As a matter of fact the Fuji came last in all my research but I decided to go with the Oly because it has RAW mode, a bit better ISO performance than the Panny and I want to use the built in Panorama assist tool.
It seems getting into SLR and wanting the same zoom range will cost a lot more even I go with the Pentax K100D...

Funny you mention it cause I was indeed now looking at the K100D but someone told me a 300mm was more than $250...can you please link me to where I can find it at those prices you mentioned and if there are multiple choices please tell me which you prefer and why.
So getting the K100D will be a big jump in quality even though it has only 6MP (I know thats not everything)?
Thanks a lot for all your help...I am giving you the well deserved points. :-)

If i am not mistaken, the Tamron Di LD is the one with best rating among Pentax users. This is the link to BHphotovideo:

http://www.bhphotovideo.com/c/product/423730-REG/Tamron_AF017P700_70_300mm_f_4_5_6_Di_LD.html

It's price now is 189.00, last time i saw it was 220.00.
Most trusted Stores for buying DSLR are:
www.BHpohotovideo.com
www.adorama.com
www.beachcamera.com

Cameta camera is a good reseller too but they only sell through Amazon and Ebay.

One personal note, i owned a k100d, very nice camera, full of features and well built, in body image stabilization is its strong point against its competition, but it's weakness are the slow focus speed indoors and lowlight conditions and slow flash sync which mean on board flash wont be good to use as fill flash under strong lighting. Also, it's Auto white balance is not good, so you will find your self setting it manually very often, not a big deal, specially if you will be shooting in RAW format.

It's counterpart, Nikon D40 (around 475.00 with 18-55 lens), has a much better Auto Focus in low light, the Auto White balance is more accurate and it's on board flash sync speed is good enough for Fill flash, but it lacks of in body image stabilization, so you need to pay for it in every lens you buy. In your case, the normal 70-300 lens cost around 170.00 and the stabilized lens cost 450.00. Also this camera is only compatible with electronic focus mechanism meaning many old lenses won't auto focus with it, not the case of the K100d.

At the end, if you are looking for a easier camera to handle, i will recommend the Nikon D40, if you don't care about settings the camera manually, K100d is a great option for the price.