The price of watercolor paper depends on the size and quality of the paper, and the quality of the paper affects the bleed of the markers.
Prismacolor markers do bleed if you use them on the wrong types of paper. They bleed horribly, in fact, on some of the cheapest papers on the market, such as sketchbook paper. However, I've even had one or two sets of Crayolas that bleed on those papers, and Crayolas rarely bleed (they are, however, crappy markers with low consistency and that dry out quickly; that's why they're cheap).
Here are a couple of samples of art I've done with markers in the past. They're a medium that I enjoy once in a while, but that I don't have a huge passion for. These days, I usually use high-quality watercolor paper with markers. You should be able to click on the thumbnail and get to the full-size version on my Picasa Web Album.
I did this art with Crayola markers on Academie Sketch Diary paper - not a horrible result, not super great either:

This one was done not long after with Prismacolor markers - it was my first attempt at that type of marker, and I used some cheap watercolor paper I had lying around. (The text and blingy sidebar stuff was done in Photoshop; just the base illustration was done in marker.) I've since become better with the Prismacolors, but I don't have anything scanned at the moment as I usually work larger than my scanner with markers.

Part of the problem I was having with blending on that pic (particularly in the skin tones on the human characters) is that they didn't bleed nearly as much as I thought they would, and I ended up using the colorless blender (poorly) in an attempt to blend them. I have now learned how to better work with both the markers and the colorless blender to get the look I want.
When you pick out markers, it's best to start out with a small set, as BogusRed said. Even though there are sometimes thousands of colors to choose from, depending on the type of marker you're looking at, generally speaking most people work with 8-12 color sets. My Prismacolor set is 24 colors, and I rarely use all of them. Markers can blend colors, just like many other media, so you can often create the tones you need. There are plenty of colors to practice blending with and try out different types of paper with. Also, a small set of colors won't set you back as much if you decide that you don't really enjoy them.