The most important thing about a bike is how it fits. Make sure you take it for a test ride (on a real trail) and make sure it is comfy for both climbing and descending.
Its worth noting that in addition to the bike you will need / want to have the following accessory items: helmet, gloves, padded bike short and jersey, tire change kit, spare tubes, bottle, cage, and bolt on grips. And they will cost about $200-300 all together. And you may want to consider getting some clipless pedals and shoes after your first year of riding. So if you have only $1000 to spare, spend 800 on the bike and the remainder on accessories.
As far as what bike... MTB has three main categories of riding: XC, freeride, and All Mountain. XC riding is longer rides with lots of pedalling often there will be lots of climbing and descending and often some technical terrain. The focus is on riding fast and efficiently. Freeride is often gravity riding but also includes stuff like dirt jumps and park riding that focuses on getting air, extreme technical challenge, and stunts. Do you swing both ways and like to keep your options open? AM riding is a mix of both. The focus is on variety and not being locked into one type of riding all the time, you might do a long pedally XC ride one day and then hits the park or jumps the next.
You should think about what category of riding appeals to you and then buy a bike that will let you explore that. It won't be much fun to ride XC on a FR bike, nor is the XC bike going to work well for freeriding. AM bikes are sort of in the middle and compromise alot on both ends until you get into the very pricey top of the line FS rides.
You can get Hardtail versions of each type of bike for under 1000 so it up to you what you want. Introductory FS version of each type are also available from most big Mfgs for around $1500.
As far as the pros / cons of FS vs HT. HT most people think are harder to ride well and thus are better bikes to learn on since they give more feedback. You will know when you cleaned that section. But they can be harsh teachers and until you master the manoeuvre you might end up looking the fool. FS are more forgiving of errors, make riding more technical trails easier, they also tend to be more comfortable for long rides in the saddle and might give you a feeling more confident with a sense of accomplishment sooner.
Edited by tromano - 7/9/10 at 9:16pm