Ronnin, have you ever used a high-quality French chef's knife? They can be expensive (my 4-star Elephant 6" Thiers Issard was about $75), but I wouldn't be without one. I prefer the sharpness and edge-holding of forged carbon steel, but since I cut acidic foods frequently, I elected to get the SS version. Still hand-forged and beautifully-balanced. A 6" Thiers Issard chef's knife and a paring knife from the same company would easily keep you 'way under budget. Admittedly, that is a small "set", but I'll bet they would very soon become your go-to knives. If you can visit a store that carries Thiers Issard knives, please do, and get a feel for them. Don't be fooled by the "brand" Sabatier, since a large and growing number of cutlery producers have been using that name, and not necessarily delivering the quality you might hope for.
I have picked up Santokus before in high-end cooks' stores, but was put off by the thin blades. Also, the pricier models seemed to have hidden tangs, which I don't care for. The Thiers Issards feature full tangs and are not only solid but well-balanced. I do a lot of canning, pickling, and freezing (we have a pretty big garden), and if you're going to process large amounts of vegetables, balance becomes an issue for me pretty quickly. My wife has very small hands, and she always goes for the French knives first.
Edit: I have a bit of arthritis creeping in, especially on rainy days when I tend to do canning, and the shape of Thiers Issard handles makes them easier to use than some of the other knives that we have. That, and the lovely balance makes it easier to slice and chop large quantities of vegetables without using a lot of hand-strength. My father still has my mother's old German cutlery, which I will probably inherit, someday, though I have been thoroughly spoiled by high-end French knives. As gravenewworld mentioned (just below) you're not going to get any set of high-end knives for $200. A starter set of high-end knives is going to run you probably $400-500 minimum, for 3-4 knives, and maybe a fork and a steel.