Olympus C5060WZ to Canon EOS 500D

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My 5mp Olympus has been a great camera as a point and shoot for the last 5 years, but I have decided to have a go at an entry level DSLR. I have given the Olympus to the in laws as a Christmas present. I have ordered a Canon EOS 500D to replace it. It has the standard Canon 18-55 IS lens. My wife still needs to use it as point and click though. Will the results be any better as a point and click than the Olympus?
 
The only worrying thing is that all the sample photos I have seen so far for this camera seem to use REALLY expensive lenses which alone cost more than the body and kit lens combined. Even the Canon website sample photos use an EF-S17-55mm f/2.8 IS USM. Is the kit lens so bad?
 
I have a few thousand photos I have taken with the kit lens on the 500D, nothing special just holiday snaps. when I sort my server out in the morning where they are stored I will stick some on flikr or something. I just checked and I have a few on there already. here not posting for criticism or anything. The bonfire and fireworks, the radio 1 at the phoenix club defiantly used the 18-55 IS. When light is good the lens is ok can produce good shots slightly soft at the edges but yeah its ok.

I had an Olympus C770UZ and thought it was fantastic until I got the 500D the images are far superior to anything the old Olympus produced. If you want any shots taking with the kit lens to have a look at let me know I will do my best. even do some comparison shots if you want with my upgrade lens.

I have upgraded the lens and now have a 24-70 f/2.8L mainly as I was asked to do some low light shots the christening on my flikr and a wedding hey I have a posh camera now what a mistake thankfully I have plenty of time to learn its not till august.
 
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