H.J.
Another vote for quality shoes. If you're worried about the cost, take a trek up to the Pleasant Prairie Outlets just over the WI border. They have a Stride Rite there, and most shoes are about 40-50% off. It's well worth the trip.
Payless and Target are great for some things, but not for a first pair of shoes. It's so important that they fit properly, and are designed to help a little one learn to walk.
Don't bother with Payless, get the good stuff. You'll be glad you did. Kids only really need one pair of shoes per season, anyway.