The Fender Squire series is where I'd suggest you look. The Squire brand is a really good entry-level axe, with design cues from Fender's more famous lines, the Stratocaster and Telecaster. Really solid stuff, and perfectly adequate for a beginner.
http://www.musiciansfriend.com/srs7/...se_pid/515115/
http://www.musiciansfriend.com/srs7/...se_pid/518334/
http://www.musiciansfriend.com/srs7/...se_pid/510422/
Or go to Musicians Friend's solid-body electric guitar page (
http://www.musiciansfriend.com/srs7/.../search?c=6241) and search by price. The ones above are all $100 to $200.
You can get a decent but cheapish practice amp for under $200. You can get a sub-par but cheap amp for under $100.
Actually, I played with the new Roland Micro-Cube amp (
http://www.musiciansfriend.com/srs7/...se_pid/480196/) the other day and I was pretty damn impressed. It can be battery operated, or take AC power. Lots of effects, and it sounds way bigger than it has any right to. MF has it for $125.