First of all before anyone sticks their nose up at the idea of riding a lesser bicycle let it be known that having a really expensive bike for pootling or hurtling about town is a bad idea because:
- It's very possible it could get stolen
- If you have a bump or a car parks on it you'd be pretty sorry
- You're quite unlikely to use it to it's full potential
If that isn't reason enough well...
In terms of pricing I would suggest that ÃÂÃÂ£200 is a safe number to aim for, if you decide to go over this consider bicycle insurance which I recommend anyway.
You need to figure out how you ride your bike in town, if you are riding on the road permanently then a road bike is probably a good option, they're light, capable of maneuvring on roads well and they're generally better value for money at the bottom end of the scale.
On the other hand a more off road style gives you more options, a good cross country bike can be had for a fair price and holds alot of good qualities in terms of ridability, it'll survive a bit of curb hopping and give you distance. Also no matter what someone tells you a cross country bike will go through a downhill course, I won a competition between some local riders on my old bike. Another good point about both road and cross country bikes is that you'll be a bit higher up in traffic naturally and way more visible due to this.
Of course if you're friendly with a bicycle shop owner there's absolutely no need to go pre-built at this price range, by carefully selecting parts on their differing qualities and prices a really sweet bike can be had for little money and he even put it together since we were giving the other one an overhaul, I went for:
The lightest frame within reason (pricewise)
24 speed shifter set and such
Simple powerful V-brakes (these are more likely to survive a crash and actually suit me better than discs, which also scream 'Steal me!')
The prescribed forks for the frame (way cheaper as you're not buying them separately)
Standard seat for the frame (it's comfy, otherwise I was getting a crappy one and making my own cushion)
Basically what I got for ÃÂÃÂ£180 was a great bike which suits me well and though being a bit on the prebuilt side the little touches like extra gears were worth the bother, and minus the disc brakes it ended up a cheaper bike...
Next up is more on choosing your bike, going in to the tasks.