I use a corner of our lounge to do most of my crafty stuff. Up until recently it was a real mess and not at all functional.
I had limited space and a limited budget but my primary need was a big desk. I managed to pick one up for $60 on TradeMe! What an awesome buy. The desk is huge and made out of solid wood.
I also bought two three tier bookcases from The Warehouse ($25 for both) and screwed them together on top of each other to make a space saving storage unit.
The great thing is now I can push my sewing machine to the back of my desk and still have enough room to iron, draft and cut patterns, block knitted and crocheted pieces and even write letters (I should really start doing that)!