Haven't played much in recent years and even when I was I was pretty poor. However, I would suggest you do have to spend a reasonable amount of cash without going silly to get a decent guitar. No amount of careful setting up, pick up changes or fancy amps and effects will turn a sows ear into a silk purse.
My interest in guitars was pricked by a mate who has a lovely Aria Pro 2 Les Paul copy in subtle green sunburst. However, when I plumbed for my first axe I went for a Sunn Mustang Strat copy as even the Les Paul copies weighed a ton if you stood up and played. And not forgetting that I was just getting into Iron Maiden and Dave Murray. I eventually moved on to Fender Japan 62 reissue strat which only cost about £300 and it was such a step up in quality and I felt played just as well as an £800 Fender USA strat. Like most things in life you tend to get what you pay for and in the guitar world there is a lot of brand snobbery.
Having said all this when I win the lottery I will be buying a Gibson Les Paul Std with a quilted sunburst maple top and an Ibanez Jem Steve Vai Evo if only to hang on the wall and just drool over
Has anyone else tried the kit option? I recently put together a Harley Benton Tele kit which plays surprisingly well. For less than £70 you get everything you need to build it, you can paint, lacquer it to your own spec and learn a bit about setting one up. The Tele was so good that I'm now having a go at a Les Paul. There's something nice about playing a guitar you've put together and set up yourself.