I am interested in buying a 3D printer. Does anyone have experience / recommendations? The cheapest I have seen is $500 at http://store.solidoodle.com/ but I'm curious if it is worth spending more for a 'higher quality' printer.
Figure out what you want to print. There's a fairly large variation in build area, so if you're wanting to print stuff the size of textbooks you're going to want a larger printer. Likewise, most extrusion printers have a minimum print resolution in the 0.5mm or thereabouts area, so if you want fine detail you may be wasting your money on an extrusion-type printer. Printers with better resolution are usually photolithography-based and an order of magnitude more expensive, at which point a commercial print service like shapeways seems a lot more attractive.
With any extrusion-type printer, I think the most important item is that it's popular, because you're going to spend time debugging and adjusting and generally fussing around with it; if you get a snazzy brand-new design you're the beta tester. If you get something that has three years of hundreds of people working with it, all the problems you can encounter have already been encountered and dealt with.
If you want to get more printer for less money you can build it yourself: there are a variety of plans where you buy a printed set of parts, source all the structural parts yourself, and make your own. What I said above about finding one where design and implementation issues are well-known and there's a support community in place goes double for this option.
I strongly recommend that you only start down the 3d printer path if you have projects for which you already have need for printed items; if you get one just because it's the hip thing to do for geeks, you're likely to be wasting your money. With that said, once you have one, you suddenly start printing a whole lot of things you never thought you would, because you can: I have friends who print live animal traps, plumbing parts, and light bulb fixture components now that they have 3d printers.