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So I need to build two 350 point armies, one cryx for myself and one for my friends to play so I can suck them into the game. I hear that the boxed sets might be a little unbalanced when fighting each other so I figure the extra points will make up the differerence and make them more balanced. What would you reccomend for Cryx and Khador, utilizing the starter boxes?

In my area, we add a little twist to small games: you get 1 warcaster, 1 warjack, 1 solo and 1 unit under 300. This is done primarily to force people to take a heavy warjack in at least ONE of their lists, but it's also great for teaching the game since you have 1 of everything. For Khador maybe:

Sorscha (starter box)
Destroyer (starter box)
Manhunter (blister)
Iron Fang Pikemen (L+7) (box + blister)
-----
296

Is this Mangled Metal or not?

If not, go with the old Standby:

Sorscha
Destroyer
Juggernaut
Manhunter
Eiryss
353/15 VPs

Alternatively, swap out the Manhunter and Eiryss for either a unit of Greylords (just under 350) or some widowmakers (355). That should get you started.

As to Cryx, I dunno: full box set (Denny, defiler, deathrippers, slayer) + Skarlock and Pistol Wraith? That's 356...A unit of Mechanithralls (instead of the two solos) is 346...

I have no idea what mangled metal is. But those look like exactly what I am looking for. So I'll put in the order today!

The rule for 350 pts is Warcaster and Battlegroup (Warjacks
only) or Warlock and warbeasts. Now if they don't want to
restrict you like that, that's different, but if they're going by
the book, it's restricted.

p.27 under duel

Under those rules, you're probably stuck at the 300 point mark, then...Though I suppose you could do two destroyers or something like that for a little 'bump'

Malfred, although a bit of a buzzkill, is technically correct...

...the best kind of correct!

However, this doesn't mean you can't house-rule your way out of page 27 to help suck people into the game. You can always flesh out your demo armies to 500 points for "serious" games in the future.

I didn't catch the part that he was the one sucking people
into the game. By all means, change the rules!

Just make sure they're aware that a 350 pt. matchup might
be expected to be all warjacks/warbeasts outside your
circle.

First, the Cryx list:

Faction: Cryx
Army Points: 316/350
Victory Points: 12

Iron Lich Asphyxious
Slayer
Skarlock
Mechanithralls (10)
Brute Thrall
Necrosurgeon

Now for Cygnar:

Faction: Cygnar
Army Points: 344/350
Victory Points: 11

Commander Adept Sebastian Nemo
Ironclad
Captain Maxwell Finn
Trenchers (10)

I've seen both of these lists perform in the 1-1-1-1 format. They've done very well.

I'd suggest if you're luring people into the game, to stay with Mangled Metal which is Caster and Jacks. Yes, some of the casters can really unbalance the game with their feats and spells. But, the most important part of the game is managing FOC allocation, and taking away infantry and solos makes it easier to learn that part of the game. Play a few games, maybe even only 2 or 3, to let people get the hang of FOC. And they generally don't get the hang of all the sick combos in 2 or 3 games (Sorscha - Wind Rush and Feat FTW!). And even if someone stumbles onto a game-winner, the other guy will generally take it in stride and not walk away when Kreoss does the Drop 'N Pop on their caster. Then add a unit or solo into the list. And I'd go for units or solos that are pretty one-dimensional. For example, Cygnar trenchers are pretty coal (and disgustingly good with the UA). But, they have a lot of special 'abilities' - Dig-in, Smoke, etc. If you just give the guy a unit of Swordknights, it's pretty simple - Tight formation, charge, Flank bonus, kill things. And Longgunners would be even easier (stand on the and shoot), but I just don't like LGs.

Having said all that, I'd play the battleboxes. They're not great, but the boxes all generally give you a fair amount of variety - a ranged jack, a good melee heavy, and an arcnode (well, except Khador - suck it reds). And the jacks are pretty 'generalist', where something like the Cygnar hunter would be a real pain in Mangled Metal (esp. if you took two with Haley).