Check to local ebay and Crag's list, you want to be able to check the bike out and not worry about shipping cost and damage. Check with the local Goodwill and Salvation Army stores. Just a few months ago Goodwill had a his and hers Bianchi 10 speeds for $8 each. They need tires but they were in pretty good shape. Check the local newspaper and bulletin board. Check with the local police for auction dates, you can get a good deal there sometimes.
The most important thing when buying any bike is getting the right size. The wrong size bike feels as bad as trying to drive a car with the seat too close to the steering wheel or too far away.
http://www.coloradocyclist.com/bikefit