You just MIGHT be able to do it for $200-250, if you do everything yourself.
Also, there's
this guide over at xbox-scene which I think is good.
You could possible do it without even needing a modchip if you use an exploit.
First thing your gonna want to do (possible before you even buy it) is find out the version of the Xbox. Now all new Xbox's (with my 1 year old knowledge on the subject) are v1.6. These solderless adapters are different then the ones for the older versions. But like I said. My knowledge is a year old.
Try to get a used Xbox somewere (like ebay, or a friend) for dirt cheap.
Ask around see if someone you know is selling one, you may get a good price
The modchip price just doesn't change. It's been $50-60 ever since I've seen it (at least the X3 is). You probably don't need a Xecuter 3 though, a 2.6 will do just fine.
If your soldering, then it's just the price of the modchip plus some solder/iron. If you don't want to solder then just get a solderless adapter (I hate them, but it's alright, I'll forgive you

)
Then, find some
cheap hard drive, that hopefully balances price and capacity (there are cheaper 120gb ones on newegg too if thats too much).
Did I leave anything out???
All the software is free. Only problem with that is you'll have to figure out how to get it

(cough....
#Xbins....cough....)
Andway, I just touched the basis of it. It's always cheaper to do it yourself. It may take a little longer, but in the end you'll know more then you started with