I agree with ChowChow on the 7 vs 8-speed concern. It's not that you need one more gear, but more like an indicator of component quality. I also agree with joel52's caution with the no-name Shimano parts.
Bike components are a perfect case of diminishing returns; at this $200-$400-$600 level though, the upgrades are relatively inexpensive, and significant in terms of quality. If you can stretch it, I think that something with an 8-speed Shimano Alivio drivetrain (maybe Acera) is a good starting point for the entry-level "quality bike". It sounds like you'll be doing enough riding to justify it.
Here is someone's short write-up on the Shimano component heirarchy. It's a little bit outdated, but it may help.
http://mc2.vicnet.net.au/home/vichpv...manoparts.html