Recreational & Family - What kind of bike should I get?

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I'm a newbie here and clueless about bikes. I would like to get a bike to ride for recreational purposes in city roads (Chicago) as well as off-road (dirt paths with rocks) in Wisconsin. I don't want to spend more than $500. The bike also needs to fit a front or back child seat so I can ride with my toddler. Don't want a trailer as I would not feel comfortable using one in the city. I would appreciate suggestions so that I am informed when I go to the bike shop. Thanks.
Riding on streets requires different tires than riding off road on dirt and rocks. And possibly a different type of bike. A road bike will not do well on dirt and rocks even with different tires. Sounds like a mtn bike or a low end cyclocross bike is what you want. You can ride on the road with off road tires but the ride can be noisy and uncomfortable.
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