A sansamp and a cheap PA amp, then dump the rest into a cab might make you and awesome rig at a crazy cheap price. Sansamp will do a generic 'good tone', PA to bring it up to level, and the cab is generally gonna be the weakest link, so is the best thing to invest in. Having put together a totally aweosome 1100w valve preamped beast in a rack for under £250, I think this is a very good way to go. Thinking about it, the 8x10 I could run it into cost me £200, so for under £500 (about that exactly including cables) I have a totally awesomely loud rig there. Overkill for almost anyone.
Edit, added a 1000w to power of amp.