I picked up a used compressor a couple years ago. Older model with a regular change-the-oil style old school low speed compressor. Had several gallons of water in the tank, but after draining it and leaving the petcock open for a couple weeks to let it dry, it doesn't seem any worse for wear. I got it cheap (actually free) because it refused to come if there was any pressure in the tank. A load jenny solved that. Throw in an oil change and a can of spray paint and I have about $30 in it. It won't win any awards and may keel over any day, but it works for my needs.
(For you non-old folks, a load jenny is a pressure relief valve. It depressurizes the compressor line when the compressor stops. If the compressor stays pressurized there's too much starting load for the motor.)
I'd say keep an eye on craigslist and see what pops up. If the unit is relatively new and comes from somewhere that it didn't get used to death it'll probably be okay for your needs.
If you get a new one, bite the bullet and get a good one. Pay a couple extra bucks and get one that will last. Chances are that hundred or so more in price will be the difference between a unit that will fail in four or five years, and one that your grandkids will still be using in forty or fifty years. I'd suggest staying away from oil-less units and getting something with an old-fashioned low-speed pump. Good ones can be rebuilt almost indefinitely, that is if they ever wear out at all. Dad's garage compressor is a 30 gallon Ingersoll that was given to him and Mom as a housewarming gift... in 1962. Granted, it needs some, well actually a lot, of TLC, but it still works for airing up tires and running the occasional air wrench. I put chalk most of that longevity up to the relatively low compressor speed and pressure limit. Low component stress = long life.
A little Google-fu turned up this...
http://www.sears.com/ingersoll-rand-20-gallon-air-compressor-vertical-tank/p-00989225000P?prdNo=2&blockNo=2&blockType=G2Brad