What kind of budget are we talking here?
I'm going to assume you want to spend less than around 100 dollars, so I will reccommend an Aimpoint-replica.
The G&P is excellent, as is the newer Guarder replicas. They cost around 100, depending on where you order it from.
As for functionality, it depends on the player and the AEG. I have a tightbore barrel and use heavier BBs, so my groupings are pretty tight. I consider my AEG accurate enough to warrant the use of an optic like a red dot. It's not "needed" per se, but it comes in very handy for those times when the first shot is all that counts. As any shooter will admit, red-dots are much faster than iron sights, although I do have a backup flip-up that I use when I don't feel like I need the speed of the dot and when I can afford for the first BBs to be off-target.
So, in short, get a red dot and you won't be sorry.
Magnification sights such as an ACOG can cause more harm than good with AEGs, but the only way to see if they're for you is to use one yourself.