I just bought my daughter a top end applause (by ovation) from musicians friend for 269.99. Wonderful guitar that will last forever. You don't get much better than ovation.
http://www.musiciansfriend.com/srs7/...se_pid/516726/
The others suggested in the thread are also good. I have a Takimine Jasmine that has always sounded wonderful and can be had for a low price.
Anyway, I found musicians friend
http://www.musiciansfriend.com to be a good source for guitars at prices I haven't been able to beat in the local shops.