If you're looking to make espresso drinks, going too cheap will be an exercise in frustration. Cheaper machines have limitations you need to work around and make it harder to get consistent results. Most people just getting started will simply give up. If your budget is less than $500, get a Nespresso. It makes a better drink than the other pod systems and beats most non-specialty shops (it can't touch a good shop or something you can make with a good machine and practice).

If you want to go further than this, the following combinations provide a very good value:

Gaggia Classic + Breville Smart Grinder Pro (~$500 total)

The Gaggia Classic is considered entry level to make good espresso by many people. I started with this and it can make a good drink, but you cannot make back to back drinks and foaming milk well is more difficult than on pricier machines.

Breville Dual Boiler + Barazta Vario (~$2000 total)

After using the above setup for a while, I upgraded to this combination. It is considered one of the best values if this is your price range. Frothing milk well is much easier than on the Gaggia Classic, and its larger boiler and electronic controller provide better temperature stability.

If you want something halfway between a semi-automatic and a fully automatic, the Breville Oracle has received very positive reviews in the coffee community, even by people who came in wanting to hate the level of automation it can bring.

Don't skimp on the grinder, get very fresh beans from a specialty roaster, and then plan a week or two learning curve. If you're interested, http://www.home-barista.com/forums/ has a lot of information.