I m thinking of buying a used car and I came across Hyundai Elantra and Sonata which looked reasonably priced to me at around $4000 - $6000 for 1998-2002 models (around 120,000 kms).

I was wondering whether Hyundai cars are a good buy or not as compared to Honda's, Toyota's, Nissan's, Mazda's etc taking fuel economy and engine life into consideration?
Does Hyundai ,being a korean company, comes into the same league as the Japenese cars?

Since the last few years, Hyundai has really made great improvements in quality and in fact in the last few J.D.Power survey's it's breathing down Toyota and honda's necks for initial quality. I, personally, wouldn't really be bothered with the Hyundai brand as long as the cars are in good shape. However, Hyundai cars are not as good in fuel efficiency as Japanese models. Baring this one feature, there is very little to diffrentiate between Jap and korean cars.
Both Japanese and Korean cars are boring to drive. If you are the sort who just wants a car to get from point A to B, choose any of these.
Before you buy any used car, do get it checked out at a good reputed garage. They may charge you some money but it will be money worth spent in my opinion.