thread count is the density of threads in one square inch of cloth. Generally the higher the thread count, the better the linen, but not always. Sometimes higher thread counts don't mean crap. Generally cheap high thread count fabrics are used with cheaper poly fibers and/or count twisted double threads in the thread count. It could be 200 theads count but they count the doubles as 2 stating a 400 thread count.
Thread count is not the deal breaker, or shouldn't be. Snobs and people who dont know a whole lot will judge purely on thread count. The material used is very important as is the finishing on the fabric. Cost is not always indicative of what you want either. Best thing to do is go into the store like a Linens & Things and test out the linen samples and see what you like. Keep in mind that some do need break in while others do not. Often high thread counts will get nicer with washings and age while looser thread counts may not last as long.
I personally like a soft finish of a Pima Sateen 100% cotton at 250+ thread count. But those fact alone don't always mean you will like it the most. I have a $350 set of 100% Pima Sateen 380-400 thread count sheets. I dont use them because they need to break in a bit for me. They are denser and warmer so in the summer I have been using an older set of 200 thread count brushed egyptian cotton that cost me like $50 on sale. I do know that those $380 sheets will break in very nice though and last me several years.
I didnt realize how important nice sheets are until after college years, but they make a big difference, and the ladies will notice too ^^ Its good to get a nice set of sheet you are comfortable with now. You will have them for a while. Like they say, you spend 1/3 of your life in bed, may as well be a comfortable place.