Travis,
Fellow Chicagoan here...I was in your boat about 13 months ago. I live in Wrigleyville, worked downtown, wanted exercise, wanted to commute by bike, but wanted something higher performance...
I test-rode a ton of mountain bikes and hybrids, and, just never felt like I found what I was looking for..until I found a 2002 Cannondale RoadWarrior 400. The bike was decent..strong CAAD4 frame, decent Ultegra/Sora mix of components, slightly relaxed riding position, but still offered a decent amount of performance for the buck. I picked one up for $799. You could probably still find an '02 model somewhere for less than $700.
Anyways, there are a ton of lower priced entry-level road bikes out there that should fit the bill. I think the Trek 1000 is decent, never been on one, but I think they are around $600.
Marin even has a decent looking bike for between 6-800. Cannondale has their 2003 bikes, which are always a solid choice. Bianchi has a few bikes that might be in your price range, but they are more than likely going to be touring bikes.
Anyways, to answer your question...you could spend some cash and upgrade your wheel/tires, drivetrain, etc. But, my advice is to find a decent entry-level road bike. This will give you the instant performance you seem to be craving.
Don't necessarily worry about commuting in the winter on a road bike. I did it all winter. You just need to be conscious of maintenance. Perhaps a set of knobbies/all-season tires would be helpful.
Let me know if you need any specific information regarding bike shops in Chicago. I know all of them, and could easily point you in the right direction.
Randy
