Ultimately, I am not entirely sure whether it makes a whole lot of sense to have an "under $400" category, but a brief survey of the market place indicates that there are a few options available between $300 and $400 that are worth looking at.

General use hunting scopes:

One of the versions of Zeiss' excellent 3-9x40 Conquest scopes is available for $399.  It is a superb scopes and you'd be hard-pressed to do better.  

Another good option in this price range is Sightron S2 Big Sky 3-9x42.

A couple more scopes have recently been introduced to the market that go head to head with the Conquest and Sightron: Minox ZA 3-9x40 and Meopta MeoPro 3-9x42.

Varminting:

Vortex Viper scopes went down in price for 2010, so the 6.5-20x44 is now available for just under $400.  For varmint or target shooting, you'll have to spend a lot more money to do better.  Vortex Viper scopes have good resolution and exceptionally good contrast

Tweeners:

For a hair under $400 you can get Leupold VX-3 2.5-8x36.  I am not a Leupold fan, but this is easily my favourite Leupold scope.

Low-range variables:

Hawke Endurance 30 1.25-4.5x24 runs just a bit over $300 and is a very nice piece.  I have one and I have not managed to break it yet.  Its #4 reticle with illuminated dot is pretty quick to acquire and is well adapted for low light.

For a bit more you can have Leupold VX-3 1.5-5x20 with heavy duplex reticle which works well in low light despite lack of illumination.

Sightron S2 Big Sky 1.25-5x20 gets an honorable mention from me, but I think its reticle is too thin for this type of scope.

Fixed Power:

I like fixed power scopes and for just a touch less than $400 there are two excellent ones available

IOR 4x32

Leupold FX-3 6x42

Sightron S2 Big Sky 6x42

Leupold FX-2 2.5x20 (for rifles that REALLY kick)

Tactical:

The $300 SWFA S.S. is still the one to beat here.

Honorable mention goes to Hawke SIdewinder 30 Tactical 4.5-14x42.  I have been testing one and it worked very well.  However, this line is new, so only time will tell how it holds up.