The following is taken from an article in this months Moutain Biking UK magazine:

If a bike is cheaper than another in a well regulated market (ie the UK or the USA), the quality has been cut back. Your looking at crap components, a monkey metal frame, bird **** welding, **** forks and so on...

there is an almost linear relationship between price and value upto 1K

A £100 is enough for a good pissup on a friday night. If your bike cost £100 then it cost £40 when it landed off the ship from Taiwan. It won't last and won't give you as much joy. Your £100 will rot in the shed.