I would get a standalone embroidery machine, as I think you get better quality and reliability in that price range. It helps to start with the largest hoop that fits your budget. Also, remember that you are going to need to purchase threads and stabilizers to get started and these can add up pretty fast. I agree with staying away from Singer! This machine gets good reviews on Amazon, but it is a little above your price range:
http://www.amazon.com/Brother-PE770-...dp/B002MQI2NM/