Crate and Barrel, U Village. You might have to go a little over your price range, but not TOO much. Well-made, inoffensively clean modern design.

Late breaking news: I just got a flyer in the mail for Dania. They're having a sale. Sofas for under $800.

There's the Kasala warehouse/outlet store in the Sodo area. Their regular store near Pike Place Market is ridiculously expensive, but you can sometimes find cheap-ish stuff down there.

I really like Dania. I have two couches from there, and they aren't showing wear and tear yet at all. They have some pricey stuff as well as some more economical items.

Their customer service is usually great, but actual delivery/availability sometimes has hiccups, but when there are problems, they are really good about fixing them.

I recommend RTG for Living Room Furniture

I'll second the Macys recommendation. We spent a bit more - $1299 for a sofa and chair, but it is good quality, delivery was free, and, best of all, it's not Ikea.

For a new couch, I recommend Pacific Interiors in Greenwood (1120 NW 85th St). You can pick your own fabrics. It's been a few years since I bought my couch there, but the prices were very reasonable, and they helped me when I was overwhelmed by choices.

We, me a and Shamrock Shake, have a Macy's couch and bed. Worth it. Sturdy heavy furniture that you guys will have in your basement in 20 years.