Given your price range and desire to shoot at faster apertures I'd recommend the 50 mm f/1.4. If you spend a bit more, consider the Sigma 30 mm f/1.4. With the 50 mm on a APS-C body, watch your DOF. It gets very narrow.

I've been going through a bit of this myself. I recently upgraded from the 50 mm f/1.8 to the 50 mm f/1.4. Huge difference IMO. The reasons are simple--faster more accurate AF on the f/1.4 compared to the f/1.8 and the f/1.4 is sharp at lower apertures (I've been using it at ~f/1.8-f/2.8), a range where, IMO (with my copy) the 50 mm f/1.8 was less sharp.

Both the 30 mm (~48 mm FF equivalent) and 50 mm (80 mm FF equivalent) on a APS-C body are within the "portrait" range (50 mm to 135 mm). The 30 mm corresponding to the "wide" end of the range and the 50 mm about right in the middle. So, get the 30 mm if you are working in tight spaces and/or planning on taking pictures involving many people. I've been using the 50 mm f/1.4 (and f/1.8 before it) for portraits on my 7D. But it is of smaller groups. For example, I just shot my sister's family of 6 and had ~20 feet to work with. The 50 mm was great.

Granted, these are out of your budget range, but there have been some recent releases that are making the 30-35 mm range really interesting. Canon replaced the 35 mm f/2 with the 35 mm f/2 IS. Bryan has already speculated it is going to be good, but no reviews yet. Sigma just released the 35 mm f/1.4. Early reviews seem very good. Both of those lenses are ~$850-900. But wait a bit and they may drop.

Good luck....