My first 1911 was a used stainless Springfield I found online for $400! It came out of the box shooting well, and some VERY minor tweaking from my gunsmith (less than $100), and it still shoots like a dream. Granted, there aren't that many nice 1911s with great night sights, thyroated barrels, tweaked slides and trigger jobs on the net for under $500, but they are out there if you're determined or lucky enough.
I know that STI, Springfield, and Kimber all offer nice packages under $1000, and I wouldn't rule out the Springfield mil-spec for around $500.
Another thing to consider iw where you want to save the money. You might consider buying a much nicer 1911 in .40 or 9mm. I have Springfield Loaded 9mm that is a sweet shooter with most of the bells and whistles straight out of the box, and while it ran me around $900 when I bought it, its obviously MUCH cheaper to shoot than my .45s.