Both are good lens's but most dont understand the difference inbetween the different series of lens's
Image stabilised lens's are really only benificial on the longer zoom units, it does not feature in many lens's under 70mm as at this range you can generally keep the camera still enough for enven a 1/2 second shot. Also in time you will have less use for the IS feature. My only IS lens is a 70-200 F2.8 LIS and its great for motorsport as it takes awsome panning shots...
So therefore if you were to have a 17-40mm there would be no need for IS and therefore the extra money gets spent of L series glass instread. In a perfect work we would all buy 5d's with 28-300mm LIS len's but not all of us have 9 grand...
So a 400D fitted with either a 17-85mm IS or a 17-40mm L series would both be great choices...
To be honest, we sell way more 17-40mm L series than the 17-85mm IS... Mainlly because the quality of the L series glass, also most people would but a 70-200 LIS as their second lens, as 40mm x 1.6 = 64mm in real terms which is plenty for portraits, landscapes & some minor macro work. I probablly use my 17-40 more than any other lens i own...