Cheap bike vs. expensive bike: The difference

Bikes can be expensive, but where exactly does quality meet performance?
If you’re buying a bike for the first time, you might hesitate on shelling out a lot of cash when you can upgrade later. But whether to buy a bike from a local shop vs. a big box store like Wal-mart is an entirely different decision altogether.
Just how much of a difference does it make?
Check out these two tests from Global Cycling Network and Skills with Phil: