I'm looking to buy a new bicycle in the next month or so (hooray for tax refunds), and I have a question. In my experience, most hardware, no matter what it is, has a price sweet spot beyond which the cost rapidly increases but the additional benefits get less and less. It's often most obvious in computer hardware, where you might get a 0.5TB hard drive for $80, a 1.0TB hard drive for $100, but a 1.5TB hard drive might cost you $200.
Anyway, I'm wondering where this price point sits with bicycles at the moment. I'd be getting something for commuting and recreation (bike paths), either a hardtail or full rigid bike. Probably a hybrid, "city bike", or cyclocross bike. The most I could spend is around $1200. That's not a really hard limit, but I can't go much over.
So what price point (roughly) will I get the most bang for my buck for a new bike? I may go over or under that anyway, but I'd like to get a reference point.