I am upgrading an office network.

This network has 9 systems, 1 print server with 2 printers.

They want me to add a file server, that will be left on all the time to allow access to files from outside the office.

I am thinking of putting a hard firewall between the modem and the file server.

I only have a budget of $300 - $500

Can anyone recommend a hard firewal in that price range?

Maybe you can pickup a Draytek 2910 Ethernet firewall. It's very easy to configure (web/telnet) and it's price-performance ratio is exellent . You will sure be below $ 300.
It also supports VPN (pptp/ipsec/l2tp) connections (passthrough and server), radius authentication.

Good luck