Some entry-level dSLRs don't have the LCD option for the viewfinder, but I googled yours and it says it has Live View. That would be the feature that would put what's in the viewfinder on the LCD screen. Can you look in your manual for "Live View"?
The Canon site says
In Live View Function, the EOS Rebel XS has two AF modes: Quick mode, which uses the camera’s standard 7-point AF system, and Live mode, which is a contrast-based AF system that reads the sharpness of subjects right from the imaging sensor, and can be overridden by pressing the AF mode selection button. A familiar feature in PowerShot cameras, Live mode AF uses similar technologies to achieve focus, while Quick mode is more appropriate for capturing action or for shooting in low light.
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Sarah 
Equipment: Canon T2i (550D) with 18-55mm f/3.5-5.6, 55-250mm f/4-5.6, 50mm f/1.8, and 400mm f/5.6L lenses
Software: Windows 7, PSE 10 (Editor), PSE 6 (Organizer), and PSCS 4
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