Well you start on the bike, and very soon afterwards hitting the ground. After a while you can eliminate the ground part.

GT Tachyon 3.0 2010 comfort bike was mine, people generally seem to agree it's a good bike here, it's a hybrid commuter sort. However, I got mine for $450 on good clearance; the good deals on it are fading out, and you can find some nicer bikes for the $600 normal street price. Performance and Nashbar still have it for $450; BikesDirect has it for $400 but with an aluminum fork (the Performance one is carbon), which is probably not important.

There are a LOT of good deals in early spring, when the weather's still cold, when people are buying bikes, and the shops are full of last year's models and want to get rid of them. You're late, but it's not the end of the world.

You'll eventually want a saddle upgrade, whatever you get, because usually the stock saddle sucks. Read Sheldon Brown's page on saddles and leather saddles; decide if a leather saddle is right for you; if not, go hunting for non-leather saddles, you'll find some good ones. Ride your bike a while before deciding you hate the saddle; adjust the saddle properly too.

You can get in for less than $1000; you can't get through for less than $1000. Find a friend with clipless pedals and a similar shoe size and give 'em a try, you'll probably like 'em (I love mine, way better than platforms). You'll want a CamelBak or such to carry more water; a small one is around $40, some nicer ones are around $100 (I got the MULE NV for $103 shipped; I carry tools in it, patches, a pair of pants...). Depending on weather, you'll want clothes: serious base layers like Under Armour HeatGear or Zensah compression shirts and shorts, wind/rain jackets if the wind and/or rain is giving you issues, the like.

So yeah, you should be able to get in pretty cheap. A lot of the expenses you'll throw will be transferable if you get a new bike--seat, seatpost suspensions (if you buy these), clothes, pedals, etc. Keep the originals for parts you upgrade, because if you buy a new bike you can probably yank them and throw them on that one, sell your old bike with OEM equipment back on.

Of course, to a point, buy a nicer bike, upgrade less stuff. Mine doesn't need new gears, deraileurs, crank, fork, brakes, etc etc etc, all good parts; I would have upgraded the seat on anything, gone to clipless pedals on anything, and had to add lights and a rack and such--none of that is standard on anything. But you still do get nicer equipment to start with (maybe nicer gears or derailers, maybe nicer wheels or a better frame, the bike is lighter, better bearings..) as you go up into better bikes. I'm not riding a "top-of-the-line" bike either, but I can stick to "Customization" because my parts are pretty decent.

Definitely go to bike shops. Even if you see the bike you want online for cheap, go to bike shops, test ride, get sized, etc. These things are important.