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I would take your mountain bike to a good bike shop and have it tuned up. It costs about $25 here for a general tune up.
I would then have them replace the wide knobbly mountain bike treads with a set of street tires (they have smoother treads and are generally narrower). While you at it get some fenders (get ones that are fixed in place rather than removable ones).
I was a bike courier back in ancient times and I used my mountian bike everyday. The key is to keep it tuned and to have the right tires. You should be able to get all of this for under $150.
I say all this on the assumption that your mountain bike is a realtively good bike to start with. Any bike you buy for $150 isn't going to be all that great. It is likely that will weigh a ton and have very lousy componentry.
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"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke
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