I third that "where are you shopping?" question.
I have done what the OP is talking about numerous times and the cost usually ends up like this:
- New chain $10
- Brake Cables & housing $12
- Derailleur cables & housing $6
- Tires $10
- Tubes $5
- Brake Pads $7
- Bar tape or grips $10
------------------------------------
$58
We always pay a little more in Canada; but I am not sure how those costs could be cut in half. Also for the record the $5 tires kind of suck, but the next step up is usually about $15 a tire...