I started out cheaply, then decided to get a nice saddle. Then a wheelset. I wound up spending around $650 on various bits and pieces, grafting it all onto a $20 roadie frame. The components were good deals, and I figure I'll run the slippery slope of eventually trading that frame out for a nice track. But I can wait, as I'm really happy with my ride.
I think the cost of converting a bike goes anywhere from dumpster-dived to money-hemorrhaging-out-every-pore-in-your-fixie-riding-body. Folks will spend on average two to five hundred, I'd imagine. I tell myself that I fall way outside that range because I really should lay back on doing any more upgrades. My music gear and computers are getting jealous.
[edited some weird grammatical thing]