As far as the road bikes vs. mountain bikes debate is concerned, I've found it's largely a matter of personal preference--mostly image and emotion. Logic and reason seem to have little bearing on the matter.
My neighbor thinks his hardtail MTB is the best commuter for our conditions. I ride the same roads and conditions, and love my road bikes. Neither of us has problems with road hazards or wear and tear. Yet, he thinks I'm silly to ride something so frail as a road bike, and I'm sure glad I don't have to pedal a lumbering tank like his bike.
It's a lot like the SUV vs. sedan thing in car people.
As for what bike to buy, don't forget the used option. Around here it's much easier to buy new. I was able to wait for the right bike to come along and bought a seven-year-old Trek 1000 for just $100. It was beat to schitt and needed a whole new drivetrain. A couple of hundred later (including tools and repair books) I had a decent bike, for well under your $500 budget. Even has rack and fender mounts.
BTW, I started on a comfort hybrid with suspension fork. I echo the advice above, that it's not the best choice. However, I commuted 3,800 miles on the thing in my first year without problems, so it can be done.
I've since retired my 1000 from daily commuter duty, although it remains in my stable as a fun ride bike and backup fair-weather commuter.
Last edited by tsl; 02-24-08 at 11:21 AM.