The first thing you need to do is figure out how much current your loads will draw. HVAC/heat pump (some have built-in resistance heaters), stove and water heater, plus well pump (if any) are the big ones. In all likelihood, you may already be beyond the $800 figure. Then, there are the 120-v fridge and lighting, electronics, etc. These have to be balanced to both legs, particularly important if it's running toward capacity on the basics, and it may be necessary to have a Load Warden on premises at all times. Generators are much(!) less forgiving than pole-top transformers, and gennies designed to meet consumer-grade price points are less forgiving than contractor-grade machines, particularly in regard to overloads. Decide your priorities and be prepared to make adjustments. You may wind up camping out in emergencies, holing up in one room with a window unit, hotplate, and a small TV. As some have already mentioned, electronics and generators (particularly the less-expensive ones that don't have very sophisticated regulation) may not get along.
All those major loads can't be run off dropcords, so pay particular attention to Charles' advice about hooking the gennie into your panel. You also have to find a dry location that isn't going to be a fire hazard, with free air movement for cooling and dissipating spills and fumes of refueling, and a way to keep the exhaust away from the house. You'll have to decide how much noise is objectionable to you and avoid too many complaints from the nabes. Cheap generators have lawn mower-sized mufflers, better ones for genset-duty have phone book-sized mufflers. And generator noise in an outage can also attract five-fingered attention, so you need to think about security.
Since diesel and NG seem to be out of the question here, make sure the engine has overhead valves, a cast-iron cylinder liner, and a low-oil kill-switch -- it may use more oil than you think, especially under load. B&S, Honda, Fuji-Robin, and Yamaha all make decent engines and have parts available for them (that all too often have to be ordered in). Parts and service for (and knowledge about) the business-end may be pretty scarce should you need them. With consumer-grade gensets and clones, you may have to replace the whole unit -- if available at all.
Bear in mind that today's gasoline doesn't store well, at all -- so the tank and carb have to be drained after use, and every six months, that red can has to be dumped in the car's tank before refilling it.
Gennies often seem to be "a good idea at the time." After they sit unused in the corner of the garage for four years, or the owner pitches a fit every time he goes to use it because he didn't drain the gas the last time, one of the nabes buys it or it goes on C-list. So it looks like you'll need to do some homework if you're truly interested.
