You honestly would be better buying a used HI-MD rather than a used (old) md that records in lossy format. The HI-MDs record in lossless WAV.
If you have the money, I agree with nameloc. You can find a Hi-MD recorder on ebay for as little as $90 (used). With Hi-MD you don't have to worry about transfers either. If you're serious about recording and willing to spend some money, a Hi-MD or a Zoom H2 would be a better long term investment for sure...
If you go with legacy MD, there's one more concern. If you want to make optical transfer to the PC, you need to pick up a used MD deck (bookshelf unit) with optical out + a soundcard with optical in (bit perfect). So there goes at least another $50 anyway.
I'm not trying to pitch legacy MD as a hi-fidelity medium, but it's the cheapest upgrade path if you have no cash at all. You will still be able to enjoy better quality than audio tape, for the cost of two Bic Mac meals. Even if your recordings are lossy, and your transfers aren't optical, the results should be an improvement from your current gear. For your own listening pleasure!
Guys, please don't flame me for this, but many newbie tapers from the "outside world" never dare to take the big step to lossless, when they see the pricetag of a full rig.
I'm one of those losers who slogged with my budget analog rig for years, slowly moving over to MD, until I could afford some decent gear. I'm just trying to show that there is an entry level rig even if you're on a shoestring budget. Just to wet yor feet, until you save up and move on...