Back to Mark's original question though - I think if I were looking for a cheap small bike to just ride around town and run errands with, I would definitely consider something in the area of 125-150 cc's. However, if I were looking in this market, I would likely look at a scooter of some type rather than a motorcycle. They're easier around town; just twist and go. Many come with space to lock a helmet in a trunk as well.
I have nothing against small engines. I do ride and love a 250 after all
