I'm also a 400D user.
In my opinion, i don't think that 400D kit with 17-85IS is worth to buy it (17-85IS definitely better than 18-55). However, I would rather buy D80 or 400D+Tamron A16 in this case. A16 have bigger aperture which is necessary for taking pictures for a child (personally i think the focus speed is acceptable). I have tried it before and it has an excellent image quality too. Of course, 17-552.8IS+400D is undoubtedly the best choices for people who can afford to buy the dearer ones.