The conventional coffee geek wisdom from boards dedicated only to coffee suggest that the best "low price" espresso machine is the Starbucks Barista at around 300-350....
A step up and considered really the only machine where you can pull a coffeehouse like crema laden espresso shot is the Rancilio Silvia which runs 499.
If you are using these machines, you of course want to grind your coffee fresh and fine, which means a quality burr grinder which can also run $200.
While I'm a total food geek and I regularly hit 3 or more grocery stores a week to get everything just right foodwise, 500-700 seems like a whole lot of coffee house lattes.
So instead my setup, and I think the best for the money...get a pound of freshly roasted whole bean La Perla de Oaxaca from Intelligentsia, a bodum antigua burr grinder, a french press, and a milk frother (if you really want to save money, skip the frother, heat some milk, pour into a closed container and shake the hell out of it).
Grind fresh, brew the water no hotter than 210, let it steep for 4 minutes in the press, froth the milk, and mix.
For less than a 100 bucks, you'll have consistently amazing flavorful coffee, and you won't be able to tell the difference from the poor barista craft and automatic machine pours at most Starbucks...the only better cup is a perfectly surfed,dosed, and tamped and hand drawn one by a great barista at a coffee shop that cares.