First of all, let me start off by saying that I am not, by any means, an expert when it comes to bikes. I can ride a bike, but I can't tell you the difference between a drivetrain or why a certain derailleur is better. Recently, I bought a bike that I really like for under $500. Here's the decision making process I went through, hope it helps.

Price-Point

When it comes to bikes, you get what you pay for, bottomline. The more expensive the bike is, the better the frame and components are. If you're looking for an introductory bike, you're looking mainly in the $350 - $500 range. Here's the thing, the popular manufacturers -  Trek, Kona, KHS, Norco, Jamis, Giant - are all basically the same at the lower price point.

Front-Shocks vs. Rigid Fork

A decision I made early on was that I wanted front shocks. Front shocks are useful if you're doing any trail riding or if you have any arthritic wrist problems (hello carpal tunnel). The front shocks at this price point aren't the best quality, but unless you're becoming an expert rider, you won't notice the difference. If you're doing a combination of road and trails, you probably want front shocks. Although a rigid fork is better on the road, if you go on trails at least 20% of the time, you'll probably appreciate the front shocks.

Frame

Most bikes at this point are aluminum frames, although some of them are steel. Steel can be more comfortable since it's not as rigid, but it can rust. You can't go wrong with aluminum since it's lighter and will last forever (most manufacturers have a lifetime warranty on the frame).

Size & Fit

Not all manufacturers make the same size bikes. For instance, the Trek 3700 line has bikes in 13", 16", 18", 19.5", 21", and 22.5" frame sizes, whereas the Giant's in the same price range has bikes in 14", 17", 19", 21", and 23" frame sizes. The frame size might be the deciding factor for the bike you get. If you're at a store, you should try out the bikes you're thinking about. This is absolutely crucial. I tried a 13" Trek bike which was way too small, but the 16" was too big for me since I couldn't comfortably reach the handlebars. I moved on to a Giant 14", which turned out to also be too small.

I was about to settle for the 14" Giant bike when I realized that at a couple of price points higher I could get a women's specific design (WSD) Trek bike. I tried the 16" WSD and it fit perfectly. This is the one I bought. Obviously, being a girl, my needs are different than a guy's need, and they're finally designing bikes to cater to this. Girl's bikes used to mean a slanted bar, now there is a lot more to it. The biggest difference I noticed was that the distance between the handlebars to the seat was much less. I could reach without straining (which is the problem I had with the men's 16"). There are some other differences with the WSD taken into account as well like the distribution of body weight and seat proportions.

Colour

This might be where your 12-year-old self comes out and says, "I want the red one". Don't deny the little guy. If you would be happiest with a red bike, find a manufacturer that sells one in your price range, try it out and go for it. At the end of the day, it really matters if you like your bike to look at, as well as ride.