Canon has announced the Canon Rebel XSi (EOS 450D outside the U.S.A.); the sequel to my beloved Rebel XTi (EOS 400D). While there are many revisions, the one that sticks out the most is the switch from CompactFlash to Secure Digital memory cards.
CompactFlash is 14 years old; it is the oldest and largest memory card format still in use. It owes its longevity to having the controller in the card instead of the camera, so that the technology can evolve with old devices still working with the new memory cards (for the most part). Other formats have gone through revisions that sacrifice a lot of backward-compatibility, such as the Sony Memory Stick PRO (2003, overcame 128MB limit), xD Type M (2005, overcame 512MB limit), and SDHC (2006, overcame 2GB limit). CF cards are also sturdier because there are no exposed contacts, and they're bigger and harder to lose. The interface is pin-based like parallel ATA (used for hard drives), as you can see in this photo of the Canon Rebel XTi's slot. If you break or bend the pins, you're in trouble, which is one thing that's worse than SD.
The Rebel XSi will take SD and SDHC cards; a 4GB card is not unreasonable as the RAW files are 12MB each. Back in the day, CompactFlash cards were common in consumer-level cameras, such as the Canon PowerShot A95 (2004-09), but now they've disappeared in even entry-level DSLRs, such as the Nikon D80, Pentax K10D, and now the Canon Rebel XSi. How much longer before SD takes over entirely?
One thing I can say for sure: CF cards do not make good flash drives.
"Use as a USB Flash Drive by inserting Memory Card"
Look mom, I have the biggest flash drive ever. Now I can block four ports at once!