I was a 'returning after a long break and ignorant to latest cycle trends' newbie earlier this year. My immediate thought was just by a cheap MTB, so I can understand why lots of newbies think that way, but I read up some on forums and the like and spoke to a few LBS's and soon changed my mind.
I was wary of buying s/h for the same reasons, i.e. not knowing if I'd be buying a decent bike, spotting faults etc., but after narrowing my choice down to a few models I happened to see one of the bikes going on e bay, not only that but it had some very nice upgrades too (wheels, carbon fork and seatpost) and I got it for a great price - so you can find bargains out there.
There are plenty of places that sell refurbished s/h bikes too, so you're buying from a dealer and have the same comeback as for a new bike - almost.
However, it's worth considering, if you end up keeping and using the bike regularly, the chances are that you will need to replace things like tyres, cables, wheels, brake pads, chain on your cheaper s/h bike, so bear the added longer term cost in mind.