I had the 17-85 when I bought my first 40D in a kit.
TBH I wasn't that impressed with it. Yes, the lens is an improvement on the 18-55, but IMHO not enough to justify the cost. CA, pincushion and barrel distortion were very evident on the lens I had and traded it in part exchange for a 70-200mm f4L.
I'd be more inclined to keep the kit lens and get your first L lens as jj pearce suggests or perhaps if you really want the 17-85mm range or near enough, go for the Sigma 24-60mm. A chap on here (Andy - Puddleduck) highly recommends it on a different thread..
Cheers, Mark