My first cost me about $800, but I've spent probably close to another $1500 on various accessories and replacement parts since then until it's finally exactly how I want it...for now. You can definitely get a good AR for under a grand (at least before this most recent panic). I'd recommend keeping it pretty simple - flat top, 16" barrel - unless you've had a little trigger time and know what you want. No need to waste money on fancy hand guards, stocks, etc that you may not like. Plus, half the fun is changing those yourself!!
As for 5.56 vs .223, I'll admit that on modern rifles, most people will probably never fire their rifle enough to see any damage. However, if you're looking for something as a defensive weapon, why wouldn't you do everything you could to make sure it feeds properly, including M4 feed ramps and "roomy" 5.56 chambering?
I do know someone who had an OLD Ruger Mini 14 that he suspects was damaged by the case of 5.56 he fired through it. I don't know the specifics, though.