Don't buy a Kmart bike brand new. They are weak and badly built.
I would say to go for a MTB hybrid, buy a good brand second hand. You'll pay about the same price as a brand new Kmart piece but you'll get a better ride, and it's a good way to get to know particular brands without spending the big bucks. If you go the full-blown MTB you don't get as much space for the seat. You do get the suspension and chunky tyres, which add weight and friction, so make your ride a bit tougher but much more comfy.
Bike forums are a good place to buy secondhand, also trading post, ebay, and even cash converters.
Go to see Paul at Velo Cycles in Nicholson St, Brunswick and tell him I sent you - he is a good friend and knows a lot about bikes, and deals mainly with commuters and family bikes now.
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