There are lots of great companies out there. I used to sell specialized and they've always put out a quality product at $500.

I would try to get into a Rockhopper and stay away from the Hardrocks if you're looking to ride off road. The geometry on the rockhoppers is more more responsive (i.e. fun) and will serve you better on the trail. The spec is also nicer.

The Hardrocks are designed to be more upright which is more comfortable for just riding around town. Unfortunately this tends to make them piggish on the trails.

The rockhopper disc is a great entry level moutain bike! I've seen the '07 at around $600. You could probably pick up an '06 in your price range.

A rockhopper will be light years ahead of your Kmart bike!!!