I was on a similar budget and feel like I got a 2002 Cannondale that was used, but it good condition. It has a full Ultegra package and is generally a nice bike.
I put new tires and tubes on it (no biggie to do, but about $70 for good stuff), had the rear wheel trued, new bar tape and put new brake and shifter cables on it. The total outlay has been around $1000. It's not as nice as something that's brand new, but it's a good quality, reliable bike that is _much_ faster than I am. The components, frame, wheels, etc. are all nicer than I would have gotten had I spent the same amount of money to buy a new bike.
For the kind of money you(and I) have to spend, it's a very good alternative.