I speak as a 20D owner also considering an upgrade.
Having looked at numerous images it appears to me that the 5D does produce better looking images, even at web size, than the crop frame Canon bodies. It's not just about resolution, there is a better tonality too. I also feel that the 40D is a lot closer to this than the 20/30D, but still not quite there!
I would therefore suggest that you would see a noticeable improvement going from 350D to 40D or 5D. Of course you then get into the "should I wait for the 5D upgrade" scenario. This Autumn, perhaps.....
Re the 24-70 L lens - I have one of these and it is not a particularly happy focal length range for a crop frame camera, although for head and shoulders portraiture it does find application. It is also very heavy. I guess that it would come into its own on the 5D, but there's got to be a better solution for crop frame.