With a D60 is my only option the Nikon 35mm f/1.8 AF-S Lens?

I want to get a good prime lens for my D60 for portraits and low light shooting, and I'd love to be able to create some bokeh. However, I was hoping to spend under $200 (closer to $100 if possible). I noticed that I have to get an AF-S lens or it won't autofocus on the D60 (grr!).So the less expensive sigma lenses aren't an option for me, and I can't find a 50mm that is an AF-S. Is the Nikon 35mm f/1.8 AF-S my only option in my price range for a prime lens on a D60 if I want an autofocus option?

There's a Nikon 50mm f1.4 which is AF-S but its outside your price range. If you absolutely have to have autofocus then the 35mm is your only option.

What's wrong with focusing manually? It's not that difficult - when I shot with film SLR's all lenses were manual focus - didn't have the luxury of autofocus then - just got on with it.

Yes. But 35mm is not very nice for portraits… Distords features.