In search of a new bicycle, any recommendations?

I own a Giant and I LOVEEEEE it. It is the best bike I have ever owned. The carbon composite frame is so light and the overall performance is top notch. I was lucky enough to receive my bike as a gift, but in all honesty when it comes time to replace it I will be saving up the money to get another. It is worth every penny and will last me a very long time.

http://www.giant-bicycles.com/

I had a Trek for 15 years and sold it for half of what I originally paid so I could upgrade to a new and sweeter Trek.
Online purchase? It can be done, but read on for my $.02:

I am an amazon.com junkie but when it comes to bicycles I firmly believe in local bike shops. This time of year many of them have nice sales going on. The owner or manager can frequently meet or beat other shops deals and throw in extras. I spent $500 on a Specialized mountain bike for my son this spring at the same local bike shop I bought mine. We were riding last week and his gears slipped a few times, so we just wheeled in to the bike shop, where the owner threw it up on the rack and made the adjustment where the cable had stretched a bit. That kind of service is worth it.
I am riding the Trek and both kids on Specialized. I have heard great things about Giant and handful of other brands as well.
Go to the local bike shop and get fit for the right frame size and the right bike type for your kind of riding (there are many subtleties based on on/off road, commuting, racing, fitness, body size, etc.)... then don't be a schmuck and go buy the same one line to save $50. You won't regret establishing a relationship with a shop that cares as much about you and your bike as you do.

I have been looking at this http://www.bikesdirect.com/products/motobecane/mirage_pro_xii.htm but I am unsure of the reputation and quality that could be expected. Should I save up a little longer and get something form a LBS? I'e been looking at craigslist for a couple of months, but nothing comes up which interests me.

Bikes Direct can be a good deal IF you know your size and know how to fit the bike and know how to assemble the bike.
If not, and your LBS agrees to it, your looking at an additional $150-200 for them to put it together for you (some shops won't touch mail-order bikes). That $500 + $150 for assembly would be a little more than the comparable $740 Trek 1.1.
BD use the right parts and decent quality frames - not cutting edge, but they won't explode or anything - that one uses some Shimano 2300 parts and Microshift brifters (The Trek 1.1 uses a full Shimano 2300 group set).

LBS is the way to go . Many offer layaway if that's up your alley too.

I went through exactly the same issue a few years ago, when I bought my beloved cross bike (which I still love dearly to this day). I paid about $690 for mine, which was less than I had thought given how amazing it feels. Here's my thoughts:

1. $500 is about entry level for a LBS bike (I think the cheapest I've seen is $430-$480 for an adult bicycle). However, an entry level LBS bike is about 1000% better than a Walmart bike. They're actually repairable, they'll last much longer, they'll ride and shift smoother, they're just better. If you can put 500 miles on a Walmart bike, you can ride happily on a $500 LBS bike.

2. It is worth it to buy from your LBS. Talk to them, tell them what you will use it for, what you're planning on getting in to, and even how much you can spend. If they're as awesome as all the LBS near me, they'll work with you to sort out how to get you what you want for as close to what you can spend as possible, or be honest and tell you where your limits are, and help you sort out how to make the right decisions for you (for me, I had to give up disc brakes to get a lot of the other features I wanted an stay in my price range - I haven't regretted it since). My budget was actually $800, and the shop I went to knew that, but didn't push me to spend it. I must have tried every size and style of bicycle in there, and ended up with one that literally feels like an extension of my body - for less than I'd planned. I could NOT have done that online.

2.a. After you buy (from an LBS), they'll fit the bike perfectly to you, and usually tell you to bring it back within so many miles or months for a tune up as things get stretched or loose or "broken in" or whatever (no out-of-box build is perfect). These will cost extra if you buy a bike online an ask them to assemble it (which also will cost you ~$100 or so), or if you bring in a bike you didn't buy there for a fitting or adjustment. Not only that, but at my LBS, because I bought my bike from them, a lot of the parts are discounted, installation of anything I buy there is free while I wait, and maintenance is really hassle free (and often free). It's worth building the relationship.

3. Like a car - don't test ride something you can't afford to buy. You will fall in love, head over heals, and nothing will ever be good enough compared to that bicycle. I think this one is too late for you, but it goes a long way towards being happy with what you can afford. I religiously looked at all the price tags before I rode and only got on one that was more - it was $1200! - but the guy assured me I wouldn't like it, he just wanted to see how the frame fit. He was right, I didn't like it, but he got an idea of a frame fit that led to my perfect bike.

4. If you can save up just another $250, you're getting into a range that opens up a LOT of really nice possibilities at an LBS, and will likely be much happier. Initially my husband refused to let me spend more than $500 on a bike for him, since he didn't use it to commute like I did, but I talked him into a $580 bike that - if he wanted to - he could commute on any surface with. He won't need another bike for the rest of his life. He may *want* another bike, but that bike will last him and be comfortable an light enough to do even the MS150 (150 miles in two days) very happily.