My dad and I used to ride department store bikes in the bare hills in southern California--before they all turned into housing developments for miles. It was a ton of fun. I don't recall any problems, surprisingly. The funny thing is, my dad's bike got stolen due to someone else's mistake (long story), and they replaced it with a nice used CroMo Trek hardtail with shimano everything... :-)

Anyway, I now think dept store bikes suck and are a terrible value, considering you can get a MUCH nicer used bike. But for me they got me to love riding.