|For all your cheap guitar needs check out rondomusic.net (.com?)
I just sold a guitar with an MSRP of $4300 and bought a $300 guitar from them. It's not quite as pretty, but it plays just as well.
Their $100 SX strat line is supposed to be equal in quality to MiM Fenders for 20% of the price. I would recommend starting there.
Also, the line6 pod with definitely suit your needs as a musician on a budget, it's a great piece for the money and I've heard amazing sounds come out of it.