Oh, for the love of...
Well, there you go... a prime candidate to be shipped off to the classified section of the website. But that does bring up the possibility of looking at the classified section here.
I like the idea of hunting through craigslist. You might also start talking to friends and people at local colleges. It's the start of a new year, and some people are thinking about new bicycles, so you might be able to get a deal on an old one. Look around as much as you can before you make a final decision, but when you decide to buy, here are a few things to consider.
-For $500 you may be able to get all kinds of "deals," on various bikes. And some of them may or may not be sexy. Beware of fancier high end stuff. replacement costs for parts can be a hassle. Around town, a shiny bike will get mroe attention from thieves than an older one with some obvious use on it.
-You'll get more hardtail for your money than you'll get from a full suspension. Both up front costs and future repair costs will be minimized. Things like shocks cost money, and moving parts will suffer wear over time. Especially if you're a big guy.
-Disc brakes are a lovely thing to have, but you'll get more out of V brakes if you're on a budget. That's not to say there aren't some budget disc brakes out there, but you'll get more stopping power for your dollar if you go with V brakes... even if it means buying upgrades after you buy the bike.
-Shock forks are pretty much standard these days, so it's pretty unavoidable. Marzocchi seems to have the best reputation as far as being generally bulletproof, but rock shox and manitou aren't too far behind, I don't think. That said, I still have a rigid fork on the bike I use around town every day. So if you find a rigid bike, don't discount it right away.
-DO NOT buy any brand being sold at toys R us, walmart, etc. That includes schwinn, mongoose, and I think GT, too. Brands that previously were reputable have been sold to Huffy and Pacific, and quality has suffered as a result. "Shock Absorbing" forks, don't... they're just spring loaded jack hammers for your wrists. To add insult to injury, the people assembling these bikes are paid by the bike, not by the hour, so they put a lot of crappy bikes together in a crappy fashion, further resulting in bad shifting, and marginal braking power.
-Don't be afraid to spend $300 on a rigid forked bike with cantilever brakes. That leaves money to spend on things like a repair manual and a few minimal tools, a seat bag, a good lock, and maybe some parts later on if you decide you need em. But I emphasize the manual and tools here, especially for folks on a budget. Learning to do your own adjustments will save you a lot of time and trouble later on, and they're really not hard to learn at all. The bicycle is a very simple machine that anyone can learn to understand, and things like tune ups get expensive. You'll have a better running machine if you can properly do things yourself.
That will also enable you to do little things like install better brakes later on if you're so inclined. And, really... once you get the hang of tuning things on your own, it's my opinion that an attentively tuned beater bike can be a lot more fun to ride than a high end bike that isn't shifting or braking as well as it could. Especially with the advent of indexed shifting, since too much cable slack means the gear you want won't shift until you're halfway to the next gear, and.. well, I guess I sound snobby. People get used to their bikes, but I keep mine very well tuned, to the point where I fiddle with barrel adjusters at least once a ride to get that shifting point 'just right."
The more you know, the better you'll be able to recognize problems with your bike, and once you're in tune with the bike, the bike will become in tune overall, and it'll do what you want almost when you think it. That way you don't have to shift halfway to the next gear to get the one you want, and you'll be able to stop fast if you have to.
I've seen people ride around cambridge on bikes with rear wheels shaped like pringles, disconnected rear brakes to compensate for the wheel, afraid to use high gear for fear the chain will fall off the edge of the gears into the dropouts, and a variety of other things. So they can't go fast enough to get out of their own way, let along someone else's. They can't shift too well, so they can't react to places where faster or slower gear settings would be an advantage. And they couldn't stop fast if they had to. But they do it every day. People get used to the condition of their bikes. That doesn't mean YOU have to.