I would like to reinforce the Honda Civic idea. Also, for that price you can look into getting a pretty recent vehicle. I have a friend who grabbed a 2007 Chevy Cobolt in 09 for less than that. I imagine it's not that bad on gas, and it looks Dang nice. But then again, I was at the other end of the spectrum as far as budget goes buying a car, and ended up getting a '91 Silverado that gets and incredible 12 MPG for $1000. Thank God I hardly ever have to drive the thing.
If you want a truck, I've heard that old 4 cylinder S10s get around 30 mpg, although you're a lot more likely to only be able to get one that either looks like, or is a clunker than with a Civic or Focus.
Things to keep in mind:
Manual Transmissions are fun
You will NEVER *need* a 5.7L V8, a 1.8L Straight 4 can get you where you're going unless you're driving straight up a cliff.
Small is good.
If you're likely to be the only person on the thing, and not taking anything around, look at motorcycles.
Driving style, tires, suspension, etc. all have large effects on gas mileage, too, it's just with some cars you can get your lovely 35mpg while driving like an idiot on melting tires.
With that budget, though, you shouldn't have any problems finding something that looks and drives good, and that gets decent mileage, just you have to make sure to look around a bit. Craigslist can be your friend here, if they cover where you live.