I use to sell them at Sears and the best ones we had were NordicTracs. Agreed on do not buy a crappy one. Are you going to be mostly walking or jogging?
We have a new baby, so we decided it would be worth it to get a "gym quality" treadmill for our house. We found a lightly used Precor treadmill on Craigslist (retails for $4,500 at Hess) and the sweet old lady (who had obviously just used it for walking) gave it to us for about $1,000. It has worked out very well, but what I did not realize until I got it home is that it is possible to know how many hours/miles the treadmill has been used by pushing a sequence of buttons on the panel. It will be worth your while to research how to do this for each specific model you're looking at, especially if you're buying one from a gym.
I have found that individuals who sell fitness equipment on Craigslist are typically selling their stuff because they just don't use it. I got my Bowflex the same way; I got it for about 1/3 of retail, and when I went to pick it up, there were many parts still in the packaging (obviously an impulse buy).
Gyms that sell fitness equipment are selling stuff because it is torn up.
Don't buy a treadmill at Academy, Sears, etc... Even their nicest treadmills ($1200) are crap. When buying a treadmill, you really need to buy quality. My guess is you can find a gym quality treadmill on Craigslist for $1500 if you are patient.
As someone who has spent way too much money on indoor exercise equipment in the last couple of years, let me warn you that it's easy to convince yourself that you'll work out inside because of the A/C, you can watch TV, and it's convenient.
The best way to save money on something like that is to split it with someone else. That way you can hang your clothes on it for a while then they can hang theirs on it for a month or two. It could be a real workout if you haul it back and forth often enough.
Smurfette, my buddy and I just bought all of the equipment from the Hilton fitness center downtown. We have several gym quality treadmills, plus bikes, steppers, ellipticals, and free weights.
PM me if you'd like to come look at it, we have all of it in one location. (Manchaca, BTW)
I bought a Landice L7 treadmill about 4 years ago for $1,700 and it ******* rocks, still as solid as the day we got it. Personally I would have preferred a Precor elliptical, but the wife's knees can't take that...
As far as it being a clothes rack, if you're buying equipment to force you to start exercising, save your money. If you exercise anyway and don't want to run on asphalt in 100 degrees and/or take the time to go to the gym, it's great...