Excellent points. I'm gonna go shopping tomorrow. See what is out there. I'm sure I can find a piano teacher around here. As far as my buddy teaching me, he's great. He's also a great bassist too and he's a very good teacher. That's part of why I leaned so heavily towards guitar, I know I'll get good instruction. But the thinking outside the box you mentioned on piano is exactly what I'm looking for. With a $200 budget what piano world you recommend?
That's great to hear! Sounds like you'd be pretty set for guitar if you go that route.
For keyboards, it really depends on what equipment you currently have.
My band's keyboardist is using one of these -
M-Audio Keystation 61 61-key MIDI Controller (I can't remember the exact model but it's by this brand, 61 keys, and just a midi controller... probably this one or very similar)
The keyboard itself is pretty cheap since it's just a MIDI controller, and the 'brains' are on her laptop. In other words, the keyboard doesn't contain any sound information, it just puts out MIDI data (through the USB wire, in this case).
If you have a computer with some MIDI software (I believe she's using Mainstage on her macbook, it allows for some pretty advanced sound sculpting), then you just need to plug in the USB from the keyboard and you're set. There's lots of other MIDI-controller-only keyboards. So the total cost SHOULD be MIDI controller price + software price. I'm assuming the keyboard comes with the USB cable (it should) and you already have speakers/headphones/etc (you could plug into the amp I guess). There are also some free MIDI software I think, gotta check it up. I downloaded some free MIDI apps for iPad that were pretty good, you can plug into the iPad using the CCK for USB and use the iPad as a module (the "brains") creating the sounds from the MIDI signals from the MIDI controller.
The downside to this is that if you want to bring the keyboard out for gigs, you need to bring the laptop with you. You'll also need something to plug into the mixer (at rehearsals, my keyboardist just uses a 3.8mm to 1/4" cable and sends a signal to the mixer from her laptop's headphones jack, but for serious gigs she uses some kind of DI interface thingy).
There's another downside to this particular keyboard, it's not "weighted". When you play a piano, because each key press results in the hammer swinging, there's a feeling of "weight" when you press down. Most keyboards on the other hand are just really lightweight plastic, so you won't have the feeling of having to move something with substantial inertia. This may or may not be a deal-breaker for you, you need to go to a shop and compare between weighted and unweighted keyboards to know. But as a classical pianist, I find that non-weighted keyboards feel... a little weird.
You'll probably need to know two terms for this, "weighted" and "velocity sensitive". Actual pianos are both weighted and velocity sensitive, so you have the feeling of pressing against some inertia, but the harder you press, the louder the note. Most decent keyboards should be at least velocity sensitive, i.e. how hard you press matters, and your note shape depends on how exactly you press the key. I strongly recommend NOT getting something that isn't velocity sensitive, IMO it's quite important (and also one of the downsides of iPad keyboard apps, it's just a touchscreen and you can't get velocity sensitive on it).
One other advantage (I suppose) is that if you ever get a MIDI bass thing (e.g. the Fishman midi pickups, the Industrial Radio midi bass, etc.) you can plug it in and use your bass as a MIDI controller for some sweet synth bass sounds.
On the other hand, if you don't have a computer that you can use for MIDI, then you'll have to get a stand-alone keyboard. That means that the keyboard needs to contain the module for producing the sounds. I don't know of any good ones within the $200 range, you'll have to ask the salespeople at the music store. Make sure to check for velocity-sensitive keys, and decide how many octaves you need on the keyboard. And also decide if you're looking more for a synth, a workstation, or a digital piano. A synth would be more for producing... well, synth pads and stuff, a workstation would be for a huge range of sounds that you would use for composing, and a digital piano generally means it's a substitute for a piano. Of course, these aren't hard definitions, but different keyboards are more suited to different kinds of stuff (especially considering their size/weight/portability and their built-in patches and how much patch editing functionality there is). Sorry, can't help you much here! I'm using a Novation Mininova, which is a small compact synth and definitely isn't a workstation or digital piano, but that's slightly out of range unless you get a good secondhand deal... got mine for about US$200+ secondhand.