One of the local bike shops in my area sells used bikes on consignment. That might not be an option where you live, but it could be worth looking into. If they do, you'd likely get a MUCH better bike than you would spending the same amount on a new big box store bike.

While different local bike shops have different characters, checking out yours certainly won't hurt. LBS also tend to be more helpful to customers who buy bikes from them than to customers who buy elsewhere and then turn to the shop for help after the fact.