Scotty, if you're looking to get into mountain biking, you don't need to spend a ton. Realistically, you could spend $300 and get a bike to ride offroad. You'll have to start replacing parts pretty soon, though, because they aren't designed to take the abuse of riding offroad. An entry level mountain bike now is much better than an entry level bike a few years ago. You'll see a lot of trickle-down technology on the less expensive bikes now that you could only get on more expensive bikes before.
If you spend around $600-$700, you'll be getting a much better bike that is a better platform for upgrades. Around that price range, you get a nice quality frame with good geometry and some durable (but not super-light) parts. So what it boils down to is, buy the nicest bike you can afford. If you only have $300, get a $300 bike and hit the trails.