How much should I plan on spending on a bike?

I just purchased a bike this summer that would fit the description of your needs. It is a crossover utility bike with suspension on the front and the back, a good sized seat for comfortable long distance riding, but mid range sized overall for speed and power riding as well. It fits well for my needs and can be used off road as well as on. It is fast and very light considering it is not a road bike. You are going to have to look more in the range of $600 to $700 minimum for a bike that is going to suit his needs. I'm sorry to have to tell you that the price range you suggested would be a "Wal-Mart" special and likely wouldn't last or be a very good ride.
Try something from this company (Rocky Mountain Bikes). It's a Canadian company, all parts are made here and they are hand assembled here as well. They have a wide selection of different styles and accessories, warranty their product for 3 years and don't overcharge. I think they will have what you need.
Hope this helps. Take care!

you can find some lower line stuff in that range, but they are heavy and the components arent all that reliable. if you can squeeze out 500 you will find you have a lot more options. go check out the local shops and see what's out there.