Is intonation something you have to work on with the recorder, or does my intonation suck because im playing a cheap recorder?

A cheap recorder is part of your problem. There are multiple alternate fingerings that may help, though. I don't know of any off the top of my head, but if you play with a tuner you could play around to see what works best with your particular instrument.

it is actually both

I would say that breathing is pretty important when it comes to intonation on the recorder.

http://www.getphpbb.com/phpbb/index.php?mforum=recorderhaven

good luck