If I would like to attach a second monitor to my MacBook air is my only option the Thunderbolt Display? Everything I've found online points me there, but those are a cool grand, so I'm wondering if there are other options out there that I just don't know about.
The Thunderbolt ports are also mini-Displayport compatible. So you can hook up pretty much any display (Displayport, HDMI, DVI, VGA) with the proper adapter.
For high-resolution panels (greater than 1920x1200), you should try to go with Displayport if possible, as the mini-Displaylink to dual-link DVI adapters have been problematic for many people (this isn't an issue for single-link DVI displays, which comprise all but the largest DVI displays around).