My Canon 500D is about 2 months old. It is my main workhorse. Having used it thus far, here's what I think are the 3 most important upgrades from the 400D, my previous camera.
1) Live view mode
It comes in really handy especially when working on a tripod, where placing your eye at the viewfinder while composing may be cumbersome. I have used it 99% of the time while shooting macro stuff. Also allows for very precise MF if the situation calls for it.
2) Higher ISO
OK truth be told: the 500D is a noiser camera compared to the equivalent Nikons, i.e. the D5000 and D90. However, that said, the high ISO performance on the Canon 500D is decent. Compared to the 400D, I would say it is a one stop noise advantage, with NR turned on. That means a lot when working in low-light. Photos are perfectly usable up to ISO 1600, and ISO 3200 is fine as long as you're not making big prints.
3) Bigger, sharper screen
It is a JOY working with the sharp 920K dot 3" screen. It allows me to check with confidence if a shot is sharp or not. Colours are brilliant and the screen can be very bright at max brightness.
So that concludes what I think are the most significant feature upgrades from the 400D. There are many many many other features which contribute to making the 500D a wonderful camera, but I consider these 3 the most valuable.