Is it reasonable to buy the $350 09' Outcast 29, and upgrade the fork to a suspension fork, upgrade it to a geared bike eventually?
It won't be cost effective. Those XT level Bikes Direct builds are great deals on parts. Start with a Reba 09 fork (which retails for $500) and you've already accounted for 1/2 the cost of the bicycle. Add some Cranks and you add another $150. Shifters/Derailleur ... $100 ... Wheels $150-$300 ... tires $40 a pop, brakes $100-$150 per axel.
You get the point. Splurge. But if you do go cheap, upgrade by buying another one of their complete bikes because you won't come close the price of those parts unless you get it at wholesale.