Your situation is similar to mine.
Back in September 2004... I decided I want to start doing tri's. It was then that I realized that I needed a bike.
I went into the shop and looked at hybrid's and road bikes. A tri bike crossed my mind briefly, but they were out of my price range.
So, after looking at hybrid's and road bikes, I decided I would take the plunge and go with the road bike, as it seemed a bit more "serious" as far as competition in tri's goes.
I have not regretted that decision!
My budget pretty much dictated what bike I would get, so I ended up with a Trek 1000 ($600). 3,200 miles later... I am still riding that bike an average of 80 miles a week!
I *dream* of having a really nice road bike AND tri bike someday... and honestly, I hope get a tri bike to prepare for my Ironman (2010 is my year!).
But, a road bike is a great place to start... you will do just find in sprints and olympic distances with it... AND you can ride in groups and not get nasty looks.
To learn more about tri's and all the details about the equipment... check out the "triathlon" section on this board and check out: www.beginnertriathlete.com.
GOOD LUCK!
PS- What should you expect to pay? For a new road bike, the price will start around $600 and go UP from there! I wish I had been able to spend another $500 on my bike, so I could have gotten better gearing on it. My gearing is a pain!
"Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather, to skid in broadside thoroughly used-up, totally worn out, and loudly proclaiming: WOW WHAT A RIDE!!!!"