The best bikes for city riding are what are known as "flat bar road bikes". These have handlebars similar to what you've got now, but in all other ways they are more like a road racing bike. They are lighter weight (under 30 pounds) and faster than what you have (a mountain bike). You don't need any suspension for the city, just a rigid bike. You would want an aluminum one rather than steel (for weight). Here is a list of really good bikes that fit the bill. Before I got my current bike I had a flat-bar bike that I loved. I wish I hadn't sold it because it was great for running errands around the city. The bike I have now is too nice for that kind of thing, so it's just for exercise.
Trek 7.2 FX $520:
http://www.trekbikes.com/us/en/bikes/2008/road/fx/72fx/
Giant FCR3 $520:
http://www.giant-bicycles.com/en-us/...ad/1244/29286/
Scott Sportster P6 $350:
http://scottusa.com/product/74/699/sportster_p6
Jamis Allegro 1 $545:
http://www.jamisbikes.com/usa/bikes/...8allegro1.html
Cannondale Road Warrior 4 $550:
http://www.cannondale.com/bikes/08/cusa/model-8HR4.html
Specialized Sirrus $590:
http://www.specialized.com/bc/SBCBkModel.jsp?spid=32215
All of these bikes come in more expensive versions as well. I gave you links to the most basic model of each. With bikes (like everything) you get what you pay for. So... if you think you will get seriously into biking, you might want to spend a bit more. If you are not sure how much you'll ride, get a basic model. All these bikes are from really good brands and will be very solid. The prices quoted are suggested retail, so you can probably do better. You might call around to local bike shops and ask what they have in the way of flat bar road bikes. If they have a couple in your price range, go test ride. That's really how you'll get a feel for what is out there and also for what feels like a good fit. It's important to test ride a bike before buying. Also, definitely buy from a bike shop. The bikes they sell are much better than what you can get in bigger department stores, and they usually include some service. It will make for a better, safer bike. Use my list as a starting point so they know what kind of bike you are looking for. There are a few other good brands, though. Whatever you do, make sure the bike isn't much heavier than 25 pounds. Definitely stay under 30.