If I was just starting out and had a grand to spend...what would I do?
I will tell you what I did first. When I got into I.M. I took the high road. I went the ppc route. You want to talk about pain. I lost about $2,000 per week for about 8 weeks. Then I hired a consultant/trainer, to help me. The next couple of months I did better. Now I consistantly make about $20,000.00 per month in profit. Sometimes it is less, and sometimes it is more, but it is profit and not loss.
Since then, I have learned SEO and have some really good long term projects running. I also started working with Google Locals and offering a service with that, that I have quite a few return customers that is paying excellent.
Honestly if I had it to do all over again. Here is what I would do.
1. Learn all I could about SEO
2. Find a Niche that is getting good searches and not to competitive. Something to learn with that is not really going to cost that much.
3. Purchase a domain name and get it cracking. Build it up to the #1 to #3 spot on Google. Do some optimizing to keep it there and let it roll in the dough while you build a nother.
Think longterm, whitehat. The ony time I think people should do blackhat is when they are bored, there is a huge amount of money to be made, or startup costs.
Hope that helps, and remember you don't have to spend all $1,000.00 at once.