There are some good suggestions here. So, for what it's worth, here's my 2 cents (and we all know you can't buy ANYTHING with that anymore!)
First of all, I would definitely check with your local dealer for trade-ins!!! That's what I did with my machine, a Viking Designer 1. Some one else traded her in for a newer machine. Mine is so old, it uses FLOPPY DISKS, but I have software that will convert any program out there (more about this in a minute...) I've had my "Vicki" for 10+ years now, and she's been a workhorse. I have no idea how many quilts I've pieced and quilted on her.
I never really thought I'd get into the embroidery that much, but I have. Not as much as quilting, but still, there are a lot of designs that "piece and quilt in the hoop". As others have mentioned, there are a ton of embroidery sites to download designs, as well as the more common (and often more expensive) commercially produced designs. Both have their pro's and con's, and both have the potential to have both beautiful and ugly designs. Beauty is in the eye of the beholder, after all.
One thing I would REALLY recommend that you NOT do... don't skimp on hoop size. If you're given a choice of two different machines and there's only $50 or so difference between one machine that has 6x6 as the largest hoop or another machine that has 8x8 or larger as the largest, bite the bullet and get the one with the bigger capacity. If you DO get bitten by the embroidery bug, you'll be much happier, trust me. And usually bigger hoop capacity means more throat space, and that's always a winner for us quilters.
The embroidery software I use is "Embird". It can "talk" pretty much every version of embroidery format there is, AND convert it to whatever you need. And it will "talk" just fine to my "Vicki", even creating the floppy disk in the special divided folders it needs. Just Google it - it's a download. The people who own it are great!! My hard drive crashed, and after I rebuilt it, I just emailed them and told them what happened, and they sent me the link to re-download again. Very user-friendly software, and very inexpensive, in comparison to most of the "Manufacturer dedicated" software.
The few real drawbacks to the combo machines are:
(1) you have to change the thread color manually. This can be both frustrating and time-consuming. One day, I'd love to get a multi-needle machine.
(2) chances are, you will NOT be able to do ball caps. Some of the newest machines have that capability now, but for the additional cost, you'd be better off getting a multi-needle with the cap set-up
(3) if you're thinking of using it for a "embroidery business", don't bother. The combo-machines (single needle) are too slow for you to keep pace with the "big boys".
Again, this is just my opinion based on personal experience.
Good luck with your search!!