I ride a chro-moly Diamondback mtb that cost me around $300 several years ago (however upgraded to clipless pedals/ Specialized racing saddle). I just started mtb'ing on her the last couple months. I really abuse her (cross country/ downhill) and she takes it fine. If I were in your position I would follow Nanci's advice regarding LBS support. Now I would probably choose a Gary Fisher or a Trek (same company/ different geometry). My next bike will cost me 6X $$$.