There's probably nothing new in that price range. You can try Craigslist and thrift stores for used loveseats, or you can buy the Klippan with the knowledge that it will not be an heirloom piece to hand down to your grandchildren some day,

The Klippan is cheap because the foam is poor quality. It won't even last five yrs under daily usage. IKEA makes only a few good items (kitchen cabs, for example) but the rest of their products are the "use, abuse, discard".

Good quality upholstery grade foam isn't cheap and even then it won't last as long as traditional steel spring construction.

The best bet for the budget constrained is used, as sushipup says. Don't think just Goodwill or SalvArmy - I picked up an amazing leather, top quality club chair with clean modern lines in almost-new shape for $125 at an estate sale place that opens once a month for a weekend in the warehouse district.

Craigslist can be a lifesaver too. It's amazing what folks will get rid of. My mother once dumped those leather and metal-frame reproduction Mies van der Roe Barcelona chairs, matching pair, for $25 ea (perfect repros, I was familiar with the originals: http://www.steeldomus.com/gb/barcelona_chair_mies_van_der_rohe.htm).

You can check Overstock.com, but a lot of the stuff they sell comes with caveats. Check those buyer reviews carefully! Be aware that you need to check for any external shipping damage before signing for receipt - plus you'll need to assemble. In your price range, futons are the best bet. Some of them are pretty good-looking. A local shop would be best for quality/price/convenience, but most futon shops (at least where we live) are more into the heavy/clunky Mission or Arts & Craft style frames which wouldn't work for you.

http://www.overstock.com/Home-Garden/Sofas-Loveseats/(,600),Modern,Sofa,/price,style,type,/2027/subcat.html

Good luck!

Precedent Furniture has a good contemporary line; look at them www.precedent-furniture.com

Ikea has a 3 month return policy. Im pretty sure by then you will have returned it.