I agree, somewhat, with AslansMonkey. With that budget I would visit a local bike shop and look at the used bike selection.
I wouldn't say anything about putting a motor on the bike unless you already know they are cool with motorized bikes. I would find a nice old school steel framed mtn. bike with front suspension. I would be willing to spend about 200 on the bike.
I would go to Sick Bike Parts LLC - Performance parts for your motorized bicycle
and get a few things. Shift kit, expansion chamber exhaust and maybe some other stuff. Just making sure I leave enough for a good motor kit.
With that kind of budget I could have a really nice motor bike with gears and front suspension. I'd never stop riding that thing.