I have to agree that cheap bikes are mostly fine. My daughter is on her 4th bike, they all cost < $120, all bought at department stores. My son is on the 2nd of 4. The 1st was given away in good shape, the 2nd will be thrown out, it's worn out, the 3rd will be OK for him next year though it's a bit worn.
The kids ride them all over the neighborhood. Never had any trouble with them, other than standard adjustments.
If/when they decide they want to use a bike as a serious vehicle, then I'll get them something from the LBS. But so far they've put their hundreds of miles in on the bike within 15 minute's walking distance of home, and with someone mechanically competent looking at the bikes periodically I don't think they're going to get hurt because of the bikes falling apart.
I've never bought a WalMart bike, their prices are frighteningly low and I won't buy from them on principle (they destroyed the town I grew up in; it was a nice town, it's now nothing but a WalMart, grocery stores, banks, and a bunch of closed businesses). So they could be cheaper than other-mart bikes (and probably are, from what I know of their business practices.