Upgrading from EF-S 18-20mm.

[DavidEccleston]

Where would you be ordering from? From what I understand, $1200 doesn't go very far in Australia.

I'm assuming you want the versatility of a zoom, so a sharp prime like the 135mm f/2, or 200mm f/2.8 are out. Both would be super sharp, work in dim lighting, give you access the the high precision f/2.8 focus points, and fit in your budget. Only you know if they'd fit your shooting style.

I'd ask if you felt you needed the full 200mm, but once you choose a telephoto zoom, that's pretty much the short end. I think the 18-200mm is one of the optically better non-L lenses, so I don't think you want any of the non-Ls. That brings us to the cheapest L telephoto zooms.

Based on US pricing:
The 70-200mm f/4L (non IS) should be well within your budget. Not quite as sharp as the IS version. Not sure how it compares to the 18-200mm. At the very least it should focus better and faster, and is a bit of a faster lens. This might be the only thing in budget at Aussie retail pricing.

The 70-200mm f/4L IS is within your budget based on US pricing, and is nice and sharp in addition the the focus and aperture bonuses the non-IS had.

The 70-300mm f/4-5.6L IS is just out of budget based on US pricing (Grey market is like $1240). If you find 200mm a bit short for your needs, maybe you'll want to save for that instead. It's a super-sharp fantasic lens. I've posted before about how the variable aperture doesn't matter much. It's only a full stop slower well past 200mm. You'd be 2/3s of a stop slower on the last 45mm (f/5.0 from 155-225mm), but if you're spending a lot of time at or near 200mm, you might prefer going to 300mm over the f/4 vs. f/5 difference.

Don't forget the used market! If you weren't completely invested in EF-S glass, I'd say look for a used 5D mk 1 (They were going for $500 over the summer) as an alternative option. I love my used full frame (1Ds mk II). The 7D doesn't get out much these days.