The two things you are going to get told are:
FIT first. Make sure you get fitted properly. THe next thing the divinely wise sages on this board will say is stay away from X-mart bikes and hit a real bike shop or try the CL/used market.
They may also tell you to raise your budget just a bit for quality.
I ride a $450 Trek 7.2 2007 for utility/around town. I ride a $450 Fuji Newest 3.0 2008 (close-out special) for distance. I bought the Fuji at a Performance bike shop, which with your budget would be my recommendation, and the Trek from my local Trek dealer.