As someone who has owned both, I can tell you that the quality of a LBS-tier Schwinn is much better, due to better quality of components (even with the lower-priced LBS models). Lots of the Target/Wally World Schwinn's use old-style bottom brackets that require a lot more attention, whereas most of the LBS Schwinn's use sealed BB's that work much more smoothly. The cups/cones on even the cheapest of LBS models are of better quality, and the wheels are a bit more durable as well. I've owned a Schwinn Tourist and Courier, both from Target stores, and even though I'd say they're of slightly better quality than the Wal-Mart Schwinn's, I'd still always recommend that folks go with the LBS-tier (see: Signature Series) bikes. I currently own two Schwinn Racers and have ridden some of the Fastback line in the past (also still want a Le Tour), and the frames and components all seem to be of higher quality...and that's saying something, considering the Racer models are merely hi-ten steel. Here's a link to where you can buy LBS-quality Schwinn's online, but please let me remind anyone interested that most bike shops will give you lifetime tune-ups (or at least set it up for free the first time, so you can enjoy the ride more):
http://www.americasbikecompany.com/Schwinn_s/34.htm