It's a great time to be buying guitars these days. Companies have finally started to realize that they can make decent guitars starting at the $350.(cdn.) range by cutting back on a lot of the junk that was wasteful in the past. It used to be that guitars had tons of lacquer on them to make them nice and shiny, which also had the effect of deadening the sound. Also increased the price. A while back they started to realize that if they got rid of a lot of the fancy binding, cut back on the thickness of the finishes, and put some half ways decent tuners on 'em, they'd have a pretty good sounding instrument, that STAYED IN TUNE.
I bought my girlfriend a Simon and Patrick (cdn.) 'folk model' guitar for about $360. (cdn.) incl. taxes, for Christmas in 2002, and it sounds Great. I've recorded with it on several occasions, and am finding that I like to play hers almost as much as my Martin.
Cheers!