totally. I always tell people "buy it once, buy it right." with guitar though I think there's a level of n00bness that works with your wallet.
I look at it as 'levels'. for example, my first electric was a Squier, totally fine, then I got better and realized it was crap, then I upped that to a US Strat, it was the shiznit, now I find it unplayable, so I got a Brian Moore, some day that one will lack in some way that can't be tweaked, then I'll up to a whatever. each time I up the level of the gear my playing definitely jumps up a notch.
ACTUALLY, with the new Pod out (damn them!) the OP can likely get a good deal on a used XT from someone upgrading.