Though I agree with organic mulch (I've had to remove a large bed of red cinders!) I think the best look would be a ground cover plant, either green, variegated, or flowering. What ever is you choice. Then spend the money, instead of gravel, on a few nice large rocks. I've seen many commercial buildings that have used vinca, mondo grass, or even annual flowering low growers, etc. with specimen plants and a few large attractive rock. Very nice, and formal looking, in my opinion.
Just an FYI: this thread was started in April 2010 and revived earlier today, after a hiatus dating back to July 2010. The OP may have made his/her decision a while back....
It has been a long time, I go to a few forums to get information and to talk about the things I like. Often some one will post a question and some times it will be on an issue that other people would also like to know what they did, but they never post back as to what they did, or how some thing worked. I make an effort to post back as I feel it is only the polite thing to do.
I called in for some free mulch from the people who do tree work, waiting for a call back, the county is not so good at call backs. I know a tree service that sells truck loads for $35. I grind up a ton of brush but I use the brush hog and it scatters it to the wind. If you can use a truck load of chipping then getting it from a tree service is the way to go, often free. I have gotten a few loads free before.