My boyfriend and I bike around the city (we live in DC) on weekends when apartment hunting. We left our bikes for 2 hours outside one of the units and someone cut the chains (we'd left the u-lock at home since it was so heavy). Needless to say we didn't apply for that apartment. Both bikes were inexpensive ($200 each when not on sale, his Schwinn Varsity from Walmart and my Schwinn Gateway from Target) so it wasn't a heavy loss, but it still stinks.
Any tips? I really liked the Gateway and didn't have any problems with it (some stuff about the way it was put together, eg brakes rubbing, that was it), but everyone goes on like Target bikes are so awful. I was planning on having it rebuilt in the spring. I don't want to spend a ton, especially since I ride casually, so $400 is really pushing it. I do want to be able to go on longer casual rides, and to use it to commute sometimes. I want handbrakes and a couple of gears for going up Capitol Hill. I also liked having the big 38" tires.
I think that Craigslist bike could be ok but you'll want to make sure it is in good working order otherwise you'll end up paying more than the Target bike. You can even expand search to Baltimore if that would not be a problem to pick up.