Whatever you do, don't buy a schwinn varsity! I'll give my quick story.
about 7 months ago my wife bought me a bike from goodwill. I repaired it, then rode it for 100-200 miles. I decided it was a good idea to buy something lighter. So, I went cheap and bought a schwinn. At 396 miles it literally fell apart. The handbars wouldn't sit still, the tires both went flat, the seat post was already wearing out the bracket and I had a grinding in my bottom bracket. I rode this ONLY on the road in town. Never curb hopped or abused it. I did wreck it once, but I got my ass kicked, not the bike. I returned it with no problems though, I have to say that's one wonderful thing about walmart.
So I got to thinking "How much different could an expensive bike really be?" My wife, being the ownderful woman she was, handed me 500.00 and said "Go buy a bike that will work" so I did and I test rode multiple bikes. The Fuji absolute 4.0 is what I settled on. I paid 402.25 after tax at the LBS here. If I had a couple hundred more I wouldn't have thought twice about buying something with drop handles. However, for a hybrid it's wonderful.
The question, about how much of a difference is easy to answer now. Think about buying a pair of shoes from dollar general. They may look really nice, but go running in them. They fall apart and are worthless. A bike is the same way. Not only that, but running in a pair of cheap shoes hurts your feet. A bike is the same way!
I've put around 90 miles on my 4.0 and it feels like a glove. It's not an expensive bike by any means, but damn for the 150.00 difference, it's a world away from the schwinn.
Lastly, others have said it I'm sure but I'll echo it. Walmart doesn't let you test ride a bike. Now you may be ok riding 103 miles on a craptacular bike and not even notice. But what happens when you decide to start riding 10 miles a day? You're riding a bike that is prone to failure and may not even fit right. One size fits all doesn't fit all, it fits very few and the rest beat up their body trying to fit on it. You're riding for enjoyment, and for health. If you're riding something that sucks to ride and hurts like hell while beating up your knees and back, you're gaining nothing.
SAVE a few hundred more and buy something that will work for you and test ride it!
Damn it, one last last thing. Don't buy anything off of craiglist without having an lbs check it over. Hairline crack can= injury and worthless bike. It's happened multiple times. The owner sees the frame starting to give and gets rid of it quickly for cheap. The next guy now owns a bike that is going to break soon, maybe while he's riding it.