Know of a Good Telescope?

Telescopes are great, but you are right - they get very pricey very quickly.
Most telescopes get used a lot the first year or so, then spend most of their time taking up closet space.
For a 5 yr old - I wouldn't spend over $200
If the interest is still there in a few years and the telescope you get her now is used all the time, then upgrade to something more expensive (they can easily run into the thousands of dollars).
I don't know if you've considered it, but they have some nice star/constellation projectors for under $100 that would show the stars on a ceiling inside your home.
That might be a nice thing because you can star gaze no matter what the weather is doing outside.
http://www.scientificsonline.com/3d-star-theater.html

Some recommendations on star gazing:

http://blog.scientificsonline.com/2012/07/stargazer/

A good first telescope is going to be something like a Celestron refractor telescope .
This http://www.telescopes.com/telescopes/refracting-telescope...
Is the one my kids have. you can see the moon fairly well from my house.
Now unless you live out from the city and have no neighbors for light pollution to interfere with your viewing then all you are likely to see is the moon with any telescope. Unless you go and spend upwards of a few thousand on a scope. If you get out away from the city and light sources then you can catch planets.
But what you can see with a scope does vary according to where you live.

We bought a very inexpensive telescope - $60 - and promptly returned it. We were VERY disappointed in it. It was hard to use, and once we did finally target what we wanted to see, it wasn't much different from just looking at the sky. It takes a long time to learn how to use a telescope, and to get your eyes accustomed to it. My six-year-old (who is also VERY interested in space) got frustrated very, very quickly. Her daddy and I held out for a few more hours, but got sick of it pretty quick.

Did some research, and this is a VERY common issue. In fact, it is recommended NOT to even start with a telescope. Binoculars are easier to use, and will help build familiarity with what you want to hunt for, before making the jump to a telescope.