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I'd like to purchase a smaller body guitar, similar to the Martin OM, but the Martin's are about $2500. Any suggestions for a high quality OM size guitar for under $1000.00?

Does it need to have electronics? A cutaway?

Just a quick remark here generally about buying a new guitar. I've never needed the cut-away that I have on one of my guitars and I very rarely need the electronics that I have in both guitars and even then, when I do need, I can just use an external mic... so my next guitar will be full bodied and without cut-away.

Try going down to a reputable guitar store near you and look through their used guitars. You might even find a Martin OM, or a small body Taylor in your price range.
I got both of my guitars used and I couldn't be happier. Just make sure to play them all, you never know what will turn you on.
I would shy away from buying used guitars online, there's no way to play them before purchasing them.

Max

I have nothing to offer as an alternative, but just wanted to say that I own an OM-21 and love it! Bought it used for around $1400 and couldn't be happier. You may not find one in your price range, but if you are willing to throw in a little extra cash, you should be able to find a Martin you'll love for life.