The second point is somewhat controversial, but most consider the 1.4X to give acceptable results. I have found it to work well on the 70-200mm 2.8L and it is also recommended for the F4 version. Using the extender makes the lens about one stop slower. According to a chart I found, the 70-200mmF4 becomes a 98 -280 5.6 lens which equals a 156-448 mm film camera lens once one factors in the digital rebels 1.6X multiplication factor.
Most do not recommend the 2X extender. I have never tried it on the 70-200mm, but did extensively on the 500mmF4 early on and only got a few acceptable photos. It seemed I could get better results by using the 1.4X and cropping more severely in photoshop. Two seasoned photographers advised against buying it and I wouldn't listen.
Now for the confusing part. This test is by no means scientific and one must bear in mind the quality of pictures is hard to judge at the size we use them on the internet. The acid test would be to print them out.
200mm 1.4 Extender
The bottom line is that it is hard to tell from these pictures if the extender is of value or not as the image holds up well to the cropping in both cases. Personally I wouldn't want to be without one. Although I don't use it often, it does come in handy. Perhaps the biggest lesson to be learned from this is that a photograph can be cropped quite tightly when a good lens is used and conditions are ideal.
Another possible option is the 100-400mm Canon L Zoom. I don't think it can be cropped as severely as the 70-200mm or the 500mm, but it is a very powerful lens which on the Rebel is 640mm 35mm equivalent on the top end. This is about a $1,400 lens. "Salty" is using mine at present and is quite happy with it. I know two other superb photographers who use it as well and all are pleased with it. On the down side it is a push-pull type zoom and gets longer as you zoom in, it also is not as sharp as a prime L lens and has only a 5.6 aperature when at maximum zoom. Its' big pluses is that it has IS, is reasonably sharp, and is a very powerful lens in a relatively small package. It is listed as being compatabile with the 1.4 extender, but it doesn't hold up too well with it and I prefer to avoid using the extender with it.
Here are some links for further information: All are to B&H Photo in New York.