How far did the technology get?

I am an amateur photographer with no real education about all this and basically just "vacation photography" experience. However, I would like to get a little further. I have signed up for a DP course recently, and learn to use some PC digital tools as well.

I have an old Cannon EOS 350D with standard Cannon lens (EF-S 18-55mm, 1:3.5-5.6 II). It was my first DSLR, and I was happy in the beginning, but recently even my mobile phone seems to be taking better pictures than the camera. So I am considering an upgrade. But is it worth it? In terms of megapixels, technology is not much further. What else is there? Are chips so much better? Or should I just forget all this and focus on me getting better in taking better pics?

And if the upgrade is good thinking, what should I be looking for in my new camera?

Thanks for help in advance...