hi - I will give an abbreviated answer for now... I am a relative road newbie and a tri thinkingaboutbee at this point... so others probably have more detailed info.

yes, there is a huge difference between mtn and road bikes, and if you are thinking about a tri then you probably would be happier on a road bike. A road bike is usually -quite a bit lighter -more responsive in terms of handling (I guess I think of it this way - shocks and suspension on a mtb is designed to smooth out the roots and rocks on the trail, while the light thin frame on a road bike is designed to let you have road feel) -eats up the miles in a way a mtb won't.

Not to throw you for a loop but there are actually special tri bikes. Usually only very serious triathletes get into these though. A true tri bike will be more aerodynamic than even a road bike is but sacrifice a little on the handling side. You are not allowed to draft in triathlons in part because of this. However, road bikes with a set of aero bars usually suit most who do triathlons for fun.

As for finding a good quality bike for up to 1k it can be done. But you will need to be an informed consumer to spot the right bargain. Learn a bit about the components and decide which ones you are willing to hunt down. Check Craigslist if you have one in your area, and find out when the local shops have their sales. And try the bikes before you buy. A fit and even short ride is very good to know if it's the right bike for you. And yes, I think you will be very happy once you find that right bike.

ok I have to go to sleep now. this staying up til 1 thing is no good for me... HTH and I am sure you'll get other very good answers.