lurker needs advice

[yurtgirl.livejournal.com]

hello people! i've been lurking here for a couple weeks and love what y'all are doing so I figured there would be nice folks here to give me advice.
I just finished nursing school and for the last 5 yrs I've done next to nothing creative. I broke out my old Kenmore w/ 2 stitches (handmedown) sewing machine and made a dog bed this summer and got so frustrated with it jamming up in the bobbin, I have decided I want a new one. I will, i promise, get more use out of it other than hems and reinforcing crotches on my uniforms.
That all said I was hoping to get recommendations for a good beginner sewing machine. I about fell over when I saw that good machines are $500 and higher, but I'm willing to part with a few of those ben franklins if I can get a good one.
My goal:
create crafty items like bags, add embellishments to used clothing, home interior items like curtains and pillows and even funky new uniforms as the ones in the catalogs are not very flattering on my body. so, i guess i need an all around workhorse. there's a huge sale on them at the local stitching post this weekend and i'm itching to get one. They sell singers, Husqvarna, Viking, and a couple models of the Brother from Project Runway. I've been told a Janome Magnolia is perfect for me but, alas, no sale going on at that store. the cool thing about the stitching post is after a while if I get better they'll take my machine as a tradein at full value for another and they give free lessons!!!
Thanks!!