Canon announced the Rebel T3 and T3i. The T3 seems to be a replacement for the Rebel XS while the T3i looks like it will sit above the T2i. The T2i will remain on the market. The T3 will feature a 12-megapixel sensor and shoot 720p HD video while the the T3i will feature an 18-megapixel sensor, shoot 1080p HD video, and includes a flip out LCD screen similar to the 60D. The T3 will retail for $599 with an 18-55mm lens and the T3i will retail for $900 with the 18-55mm lens.

B&H has a press release: HERE