I think the best advice, if you have your heart set on a particular machine, is to wait.
Don't rush into anything. A really nice one will come up. You just have to wait for it.
Trust me, it will show up.
Keeping your eyes on this site is a great way to find machines in great condition for very reasonable prices.
Markc is a good place to start looking too though.

To answer the topic heading "How much to spend on restoring a machine". How deep are your pockets?
I've spent a fair bit on a couple of my machines but only because they were a low product or I didn't think I'd be able to find them again.
When it's a keeper, I would easily spend $1000+ on a favourite pin.

Good luck