I personally do not have a steel bike but my BF runs an on-line bike shop that deals in a lot of steel. He loves it and says that a good steel bike rides better than carbon although it is heavier. I have co-worker that just bought a bike from him. This is her rain bike, it's a Soma Double Cross. She says that she thinks it's a nice to ride as her carbon Specialized Ruby.

The BF says that Soma is really good quality workmanship and materials for the price. He does custom builds - you order the frame through him and he builds the bike up with whatever you want. But a build by him would likely be out of your price range. He could build a Soma for less than $2000 but not as low as $1000. But you might be able to get a complete bike from an LBS for around $1000.

Here's his website if you're interesting in just looking at what kind of steel frames are out there that might not be the typical brands you see in an LBS. Click on frame inventory on the left and the chart can be reorganized by clicking on any of the column titles... for eg top tube length (TT) or price.

Hope that helps.