JB has a Raleigh 16" that's held up amazingly well. It's 12 years old and this is its 3rd kid. It's steel, which tends to be cheaper. Our local shop has one now for $114.
When I've looked at Walmart and like the things I've noticed was lack of component quality in general, bearings, brakes, wheels, things of that sort. They also tend to weigh more. Probably not a big deal for a kid bike he'll only be on for a few years. We got ours from the lbs more for our peace of mind than the kid's.
I don't know about your 4 year old, but mine could care less about whether a toy is used or not, if you can find one that's not too bad off. JB is fond of the water bottle (handlebar mounted), blue and white cool helmet (of course) and bike gloves for those long rides to the park. The biggest thing I have to remember is keeping the tires aired up, especially with training wheels.
I used to have an open mind but my brains kept falling out.