http://www.bikeforums.net/showthread.php?t=116128

If your spending cap is a hard $500, I'd say convert. Get an old road/touring/whatever bike from a pawn shop/thrift store/dumpster with horizontal dropouts and decent cranks. Swap out the rear wheel for a track wheel. You can get a cheap rear wheel from IRO, or else build your own wheel with parts from nashbar. For all technical questions of any sort, This Man is your god.

If you're willing to break your limit a little, just get a complete bike from IRO. This place is full of endorsements for them, and they have excellent customer service. Welcome to the fold.