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A good bike is worth the extra money, a bad one is worth horsewhipping the bike makers for bilking the customer. And just because it is inexpensive doesn't mean it's a better value--some of them are crap marked up even more than the high dollar bikes.
How much you should spend depends on how much you ride it. If it's a daily rider, you should spend more on it, it it's occassional there's not a lot of reason to spend much unless you just like high end performance.
Which brings up why some bikes are justified in asking a lot. It basically is for three reasons--name, durability, or performance (or any combination of the three). Forget name, you're not trying to impress anyone but yourself. So in an appropriately priced bike the things you are looking for are construction of the frame and components. The frame is the durability factor, the components the performance, althought but affect each other.
Unless you want to put on a jersey and ride in a peloton along the shoulders of your roadways with the other yuppies, probably you should worry about frame mostly. You can replace components as they wear out, but replacing the frame is just replacing the bike. Don't get really cheap components or you will hate the thing pretty quickly, but put the money into a good frame with decent components, and you'll use it longer. Especially in Detroit, if my image of the city is close to accurate.
As for frames, good aluminum frames are good, bad aluminum frames are awful. Bad aluminum has no flex, so it can crack, pull apart at the welds, and dent--and a dented aluminum frame is a sculpture, not a bike. I love steel frames, but they are also either great or really awful. If you can find a good double or triple-butted steel frame, you'll have a frame that flexes, will last forever, and isn't really any heavier than the aluminum ones in real world situations. I have an old Gary Fischer double-butted steel frame, and it's the best bike I've ever owned, and yes, you can tell the difference between that bike and the ones from Sears I've used.
Just my thoughts. Not much help, but maybe it will give you a place to start asking questions. Find a bike store near a college--that's where you'll get the best advice, and maybe even some good bargains. Other than that, there are a ton of places on the web to look up whatever bikes you narrow it down to.
Oh yeah, and look at Craigslist. There are some good prices on used bikes, but talk to the owner long enough to be sure he or she owns the bike and didn't just salvage it from a bike rack with a pair of bolt cutters.
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