1. Is it hilly where you'll be riding? No reason to tote more weight up a hill than required.
2. Commuting only, or will you take some adventures? City bikes certainly will have their limitations. A Mountain Bike with some cross-functional tires can haul butt, and hit a few trails.
3. Have you every riden a Road Bike w/ drop bars before? A cyclocross bike is a good all-arounder. I can ride mine on most trails I frequent, adn ride 'er there an back. It's fun to pass FullSuspension All Mountain bikes with my rigid Cross Bike.
These guys build some affordable and quality bikes. I have two friends that ride their IBEX Cross Bikes everywhere.
http://www.ibexbikes.com/Bikes-Hub-Specialty.html
You can get a great bike for $1K. I'm a USA Cycling Coach, and I help people buys bikes all the time. Mountain to Tri. Remember one thing, regardless of the deal, it has to fit. Peoples biggest mistake is buying based on price, not fit/function.