I'm selling a Cherry Canon 40D with super low shutter count for $525 shipped. It's the body only, but it's practically brand new. You can get a sweet 50mm prime for about $100 to go with it. I think that most will agree that the 501.8 is night and day better than the 18-55.
A little above budget, but if you're getting into photography you better get used to going over the budget a little bit!
Plus you'll be happier with a nice body and lens over a kit.