Reddit mentions of Shimano Acera M360 7 and 8-Speed Rear Derailleur with SmartCage, Black

Is the shifting indexed (single click for each gear) or friction? If it is friction, get whichever suntour or shimano derailleur is cheapest online. It should be one without the hook also called a derailleur claw. A used one would be less than $20 online, or you could get something new like http://www.amazon.com/gp/product//B000F5EGAA/ref=twister_dp_update?ie=UTF8&psc=1

don't a friggin get an X9 for that bike... its like putting a corvette engine a tercel. doesn't make sense and won't even work. your bike had a tourney rear derailleur which is the most entry level shimano has. upgrade a bit to this acera for $20 and call it a day. It'll shift better than what you're used to and won't break the bank. it will work with your existing stuff as well. simple as removing the busted one and installing this. watch some videos and you can get it done easily.

Will I be happier with the shimano acera?

Its made of steel like my old one and I like the idea of nice shifting on my refurbed bike. Then again I also like money and your recommendation for the matching tourney cheapo model. Let me know what you think.

Sorry about the late reply, but here you go:
Shimano Acera 6/7 speed rear derailleur:
http://www.amazon.com/gp/product/B000F5EGAA
It has plastic roller gears for the chain! I have not ridden it much, but something tells me when a stick lands in, it won't shred it up like my xtr. You might want to spend more for a better one.
I'm not sure what the cage length is but if you get another, you'd probably be best off with a medium cage, but you might need a long cage. Check this for more info: http://forums.mtbr.com/showthread.php?t=205890


Here is the cassette: http://www.amazon.com/gp/product/B001BY7ZP2
I got the 13-30, but I think i'd recommend the 13-34 for the lower gearing.

The cheap wal mart bikes can be okay as long as you aren't looking to ride offroad, and replace the shifters/rear mechanicals with proper parts.

That doesn't meant spending a ton of money, the older 7 speed shimano freewheels can be found on Amazon for $15 or so, and so can the derailleurs.

The problem with the freewheels on the walmart bikes is you often see they'll be "slick shift by DNP" freewheels which have a reputation for lasting for about 50 miles then dying. I think I've read they're also made from old shimano tooling, which is worn out so they never shift right no matter how much you adjust them.