Welcome to the site (and welcome to an expensive hobby, lol!!)
It depends what you want to photograph... You already have a telephoto and a kit lens, perhaps replace the kit lens with a decent walkabout lens (between 17 and 100mm) as I find the kit lens from my 400D (which is the same iirc) not too sharp or vibrant. Anything from Sigma or Tamron should fit the bill, Canon lenses of this type seem to be a lot more expensive.
Then you could consider wide angle for either landscapes or street scenery, though this could seriously eat your budget, especially if you went down the Canon route. I have the Canon 10-22 which cost me over £500 at the time, its even more expensive now but you can pick up a 2nd hand Sigma 10-20 which does exactly the same thing for about £250, though that would half your budget. Damn good lenses though!
Finally I would suggest the 50mm 1.8 (aka Nifty Fifty). I personally love this lens, and although some find the focal length a bit long (esp on crop sensors like the 350D) I love the depth of field you can achieve on this and its very very sharp. You can pick them up for about £50 brand new online. For a fixed 'prime' lens I find it surprisingly versatile as well, and as you have to physically move the camera to get the shot, rather than zooming, it can teach you a lot about framing etc (frustrating to start with) and might even improve your skills!
Enjoy!