The main problem with going used is the same problem with going with a bike from Costco...lack of experience by the purchaser. A used bike can have any number of problems that an inexperienced cyclist isn't equipped to deal with. He could actually spend more money on a used bike and making repairs to it than he would on a new bike, especially if he doesn't know what to look for. An experienced cyclists with some amount of mechanical knowledge under their belt can easily assess what is a diamond and what is just rust.

Once a new rider has a little experience with with bicycles and a bit of mechanical knowledge, I'd say go nuts. But the mechanical section of this forum is littered with questions about bad second hand purchases by new riders. Ya ain't savin' any money if you have to buy the bike twice.