Better balls shoot straighter and have fewer barrel breaks. As far as where to find inexpensive balls, we're all looking for that place. Most online or local shops will cut you a deal on larger quantities of paint. Shipping is what really kills the price. You don't want cheap paintballs.
Cheap balls have a tendancy to break and typically ruin the whole day.
To save money, go with friends and buy the largest quantity you can at once. It's usually cheaper this way, and you can be sure to get better quality paint. I used to buy my paint online, but found that the store I frequent in Randolph has similar prices on the paint I use. Upgrade what you feel NEEDs upgrading. Since then, I've had new Spyders which needed this or that done to them, but I always use them first and see WHAT needs to be done.