Kotter,

a second hand mach1600 is worth next to nothing. Do not buy it at $500. I wouldn't pay $200 for it.

For uni you are MUCH better off on a singlespeed setup with 46x17 or 48x17 freewheel or fixie if you're brave. Any crap wheels. Probably flatbar best. Can be standard frame, cruiser, or MTB frame depending on what other uses you have planned for it.

The idea is to ride a bike that you like but is not appealing to potential thieves. The single speed will test you legs on the undulatin terrain around waratah/jesmond and over Scenic Drive on the weekends.