Is T2i better than Canon XT/350D?

Hi! I would like to ask your expert opinion on this. I am a student who likes photography. I am currently the proud owner of a Canon XT/350D. However, it was recently overshadowed by a T2i which is owned by a friend of mine. It seems that the T2i has better colors and the pictures have better output than what I had. We even took the same pictures to compare and I thought that his were better. Is it just me or is T2i really better? Is it advisable for me to do an upgrade? I am still a student so I do not have a lot of cash. But still, I really do love photography. Any advice?
