The reason Canon offers the EF-S 18-55mm f/3.5-5.6 IS zoom lens (and Nikon offers a similar kit lens with their entry cameras) is because that lens offers a "standard" working zoom range that goes from wide (but not ultra-wide) to a very modest telephoto length (but nothing extreme.) Optically it offers fairly good results. But the most important feature of the lens is that it keeps the costs DOWN to something very reasonable.
Consider that there is a REASON they make so many lenses. If any one single lens could be "it" then that'd be the only lens they made and there'd be no point to having a camera that has the ability to remove and change lenses. The reason they make so many is because no one lens is the "best". It really depends on what you're trying to shoot and what your shooting conditions are.
Canon makes an EF-S 17-55mm f/2.8 IS USM zoom lens. Notice it's nearly the same zoom range as the kit zoom (1mm shorter on the wide end, but the same focal length on the long end.) But notice the focal ratio is simply "f/2.8" rather than the range "f/3.5-5.6". That's because this lens can maintain a constant focal ratio through the full zoom range AND it gathers significantly more light (it's an f/2.8 lens... at a 50mm focal length the kit zoom's widest focal ratio is f/5.6 compared to this lens at f/2.8. f/2.8 gathers FOUR TIMES more light as compared to f/5.6. That means the shutter speed can be four times faster... or you can reduce the ISO setting you'd otherwise need to use so the image has less "noise", etc.
The lens also has internal focusing (end of the lens doesn't turn when it focuses... really nice when you've got a circular polarizing filter attached) and it has the much faster and quieter USM focusing motor (great for action shots where the focus distance keeps changing while you're trying to shoot).
Sounds great, right?
All this comes at a price... whereas the kit lens would sell for about $200 new, the 17-55mm f/2.8 lens sells for closer to $1100 new. Basically you get what you pay for.
There's no question the 17-55mm is the better lens, but mostly what the 17-55 is better at are what I call the more extreme cases... where you're pushing the shooting situation to the edge. If it's a fine sunny day and you're shooting some extremely well-lit non-action shot, then both lenses are capable of excellent results. Most lenses do well in "easy" shooting situations. When the situation is less idea then those expensive lenses really make a difference. In fairness, the f/2.8 lens can also let you limit the depth of field for a nicely blurred background while your subject is still tack sharp. So while both lenses can get a good "exposure", the f/2.8 lens will give you more options and let you do some selective focus.
You could buy a lens that doesn't zoom at all -- these are called "prime" lenses. You "zoom with your feet". Walk forward and you'll notice the subject gets larger. ;-)
Of course you can't always just walk forward. Walk onto the field or court during a sports game and you may find yourself being escorted from the premises and asked not to return. But if your shooting subjects are such that you CAN control where you stand to get the shot, then primes generally have MUCH better focal ratios (they collect a lot more light, offer the ability to control the depth of field in ways that a consumer-grade zoom lens cannot) and generally outperform a zoom in every way EXCEPT the ability to zoom. A 35mm prime lens would provide you with something fairly close to a "normal" angle of view... meaning the camera sees comfortably what your eyes see comfortably... it's not wide angle... but it's not telephoto either.
Ultimately it's WHAT you like to shoot that dictates the type of lenses you should own. Landscape photographers prefer wider lenses. Portrait photographers prefer moderately (but usually not extremely) long focal lengths. Wildlife photographers seem to like lenses that are roughly 400mm... give or take. Photojournalistic and street photographers seem to prefer lenses that are pretty close to "normal" (give or take).
I should caution... they do make a category of lens called the "super zoom". Canon makes an 18-200mm. Sigma makes an 18-250mm. Tamron makes an 18-270mm! These are super-zooms. One lens to do it all... or so it would seem. In actual use, not so. They're all variable focal ratio lenses. None of them are "fast". Optical quality is mediocre -- not great. Generally a less-ambitious zoom will yield better results. The super-zoom class offers convenience as it's major advantage, but is disadvantaged in most other areas.
Canon makes an 18-135mm which is a less ambitious range that's probably as close to "all purpose" as I'd prefer to get. It's optical quality is still good (not outstanding, but decent).
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