Having come back to cycling over the last couple of years, my first bike was a cheap mountain bike. It has been good fun through the woods with the kids, but useless for getting from A to B. Buying cheap meant getting gears that don't select too well, brakes that drag, getting the odd component that fails and the odd puncture, but obviously the biggest drawbacks are soft fat knobbly tyres, weight, and energy loss through unnecessary suspension components.
Next I decided I'd like to do 20 mile trips, and have a bike that would be an alternative to the car for short journeys so I got a hybrid. It has 23mm thick Armadillo tyres that go up to 140 psi and don't puncture, proper high end gears, hydraulic disc brakes, and I've added a few more bits in the pursuit of speed (75 km/h so far), and an average speed around 17 mph.
I do a lot more miles on it than I ever expected and the mountain bike hasn't really been out since. It has been strong enough on rough and muddy surfaces when it has to until the grip fails on account of there being no tread.
The price of this beauty was about £200 second hand (and about £700 new). It probably still owes me about £100 after the petrol savings but with the warmer weather coming it won't be long.
Anyway the key thing is to get the right kind of bike for your needs, and try to get out of the first shop you visit without a bike, because it'll be game over. Go over and look at the expensive bikes (£1000 ish), and get an idea of how the best bits work. Look around the handlebar stem, the bottom bracket, the cranks, the gears, and the brakes.
I've found the smaller cycle shops are run by people who are passionate and will talk for as long as you want, and probably the best advice on a forum dedicated to an odd Fiat from the '90s...
Here's one I'd be watching.
Giant FCR 
