I wanted an around-town beater bike and ended up buying a leftover 2009 Diamondback Insight 1 at my local Performance bike shop for $250 a few months ago. I outfitted it with full fenders, bell, bottle cages, and a computer. I initially put on a rear rack which I ended up taking off due to garage door vs. roof rack vs. clearance problems.
The gf liked tooling around on it so much we ended up getting her one (the girls version is nearly identical except for different seat and cutesy graphics) at a local Sports Authority for $300 last night.
We looked at several brands at local LBS', REI, etc. Low-end hybrid type bikes all seemed to be made in China and have the same drivetrain and # gears. Going up a notch and paying $50 more usually gave you 1 more gear, better shifters, maybe a better rear deraileur and maybe rims that sucked a little less. This includes Giant, Specialized, Trek, etc..
I'd recommend Diamondback to others that are looking for a cheap hybrid bike. Unlike our road bikes I don't care about getting the hybrid dirty, scratching it up, laying it on the ground, riding it in the rain, wearing "riding clothes" to ride it, it getting stolen, etc. We just get on 'em and ride. Very liberating.