Which would improve image quality more, lens or camera body?

Thank you for all the varied and great responses!  To answer a couple of questions, the kit 18-55 is the second generation model but one of the earlier ones so I had wondered if the process had been refined at all.  I do have the 50mm F1.8 prime but it doesn't go wide enough for the group photos I take plus I think the fine focus is inconsistent although I would have to do more experimentation to confirm.  It can be really noisy and scary to use particularly in low light when it's hunting around for a focus point.

As I was looking through some of my photos, I realized in some photos I may be quibbling a bit too much as I found I was looking at them at 200 percent.  I also confirmed what a great program DXO Optics Pro is.  I know you get more by shooting raw but the difference between a DXO Optics converted raw picture compared to the original from the camera is like night and day.

My biggest gripe about the 1000D is the shallow buffer of image capture and the very small focus confirmation point on the viewfinder.  I don't do action photography that much but sometimes do like to take a quick succession of photos and it can only do about three raw photos in succession before the buffer gets full.

If one was to splurge for the T4i with the 18-135 STM lens are you giving anything up in image quality in the 18-55 range of the kit lens?