But, in your dad's case, I don't recommend a mountain bike eitherstill too stiff and, in many cases, too many unneeded bells and whistles. The best bike for your father is one of several so-called "hybrid" or "city" bikes. These look much like a mountain bike, but have smooth tires (better for paved streets), an even more upright seating position, and features designed to make the bike as comfortable as possible. A good example is the Bianchi Advantage ($420). It has a light aluminum frame, good-quality components, and both a suspended seatpost and front fork for that extra comfort. Very plush. Another good choice would be Cannondale's Silk Path 500 ($950), featuring Cannondale's excellent integrated front shock, a suspended seatpost, and smooth-shifting Shimano components. It's more expensive than the Bianchi, but if you found one on sale or negotiated a lower price, you'd be within your $800 budget.
Don't forget, also, that extras will boost the cost of a bike. Helmet, bike shoes (helpful, but not mandatory), a seat bag for spare tubes, frame-fitted pump, and gadgets such as a cyclocomputer (non-essential, but nice nonetheless) can easily add over $100 to the final price.