I was recently in the market for a used car -- I was considering a Toyota Corolla (we already have a 1996 that will probably run forever), but ended up going with a Ford Focus ZXW instead (I wanted a wagon, so my options were a little more limited).
Corolla is a solid car and a great choice for reliability and fuel economy. Also, the 2003 (9th generation) you are considering got good reviews:
http://www.canadiandriver.com/2006/0...-2003-2006.htm
Contrast this with 1998 to 2002 models (8th generation), which I've heard have some problems (although still pretty darn reliable):
http://www.canadiandriver.com/2008/0...998-2002-2.htm
As an FYI, I've heard 1997 Corolla's are not good -- we got lucky with a 1996, which has as much bang for your buck as any comparable car IMO.
However, if you want to save a few bucks, a Ford Focus is a good bet for a domestic. They come in different body styles (from 2-door hatchback to 4-door sedan to 5-door sport hatch to wagon), and you can often find newer ones south of $10K. Just be sure to get one 2005 or newer; the older models (especially 2000 and 2001) had a number of problems that have been resolved in the newer releases.
http://www.canadiandriver.com/2009/0...-2000-2007.htm