My commuter (a late 80's vintage Canondale hardtail mtn bike) was purchased for $50 at a yard sale. I bought a similar era GT Talera hard tail frame (in my correct size) for $90 and swapped out all the parts. I upgraded the brake set, handle bars and stem and shifters (via eBay) for another $55 or so. The fenders and racks ran me another $60 (thank you, CL). About $255 total.
My lovely wife bought me, as a birthday present, a Brooks Champion flyer for another $89 (super price!). Now I've over-shot the under $300 price range. This bike runs a seven speed cassette on the rear and has the ubiquitous threaded 1" steerer. Along with the old-school toe clips and straps; nobody notices this rig next to all the other more modern rides or those annoying hipster/poseur bikes. Thankfully, my ride seems to be overlooked by the bike thieves of Boston (Knock on wood!).