You cannot go wrong with Colt. Not the cheapest thing out there, but they set the standard. I have a couple, and have also scratch built several by assembling components from various manufacturers to get what I wanted. Thats the beauty of the AR it is so modular that virtually any part will work in any other gun
The lowers I used in my builds were Rock River arms, not the most expensive but not cheap either. Quality seems fine, fit is tight with most uppers until they wear together with a bit of movement.
You can get cheap guns and good guns. Your best bet is to go over to http//www.ar15.com/, http://www.ar15armory.com/forums/forums.html
, three good fourms with a lot of info on buying or building of these arms.
If you want the cheapest ammo stick with the 5.56 Nato (223 Rem) Make sure whatever you get is marked for 5.56 Nato ammo as they claim chamber is slightly different and it supposedly dangerous to shoot 5.56 ammo in a .223 Rem chamber. I have been doing this in a Remington bolt action rifle for 40 years without problems.