Hi Steph. You need to ask yourself some questions- what do I want to do on a bike? Bike paths? Easy dirt trails? Climb mountains and ride down them? Next you need to do some research. Go to some bike stores and ask questions. They are your first source for helping you know what is involved in choosing a bike (unless you have friends who ride). Next you should check manufacturers websites- Kona, Giant, Specialized, Trek, Gary Fisher come to mind as reputable makers with bikes in your price range. Right now is a good time to get a deal on a 2006 model, like 30% off. I personally would not buy a bike from REI but would rather stick with a bike store- a good one will give you life time adjustments for free.
Another good resource is to search the forums on mtbr.com.