The people who say "don't play a cheap guitar, get a good one" are missing the point. Of course a good guitar is better than a cheap one, but there are occasions when you don't want to use your best guitar - a gig in a rough pub, for example. I now have a bunch of guitars which I bought for different purposes.

My advice is to buy on ebay - there are some great bargains to be had, but the risk is that you might get ripped off. To avoid that, do your homework first, check the buyer's feedback, etc., and you should be OK, as with buying anything else on ebay. (I got a good guitar in immaculate, as new condition, with all the trimmings, for around half the shop price).