Remodeling

So, I had this beloved red twill couch that I finally decided I needed to sell in order to make room for more child junk. I unloaded it to a really nice gay couple who will treat it quite nicely. In exchange, I took my little wad o' dough to (where else) Pottery Barn Kids and bought the beginning of my shelving system. The pics didn't come out too well, but you get the idea. I love love love the shelves and will eventually buy more of them and add baskets and such, but all in due time. Anyway....so, we still need to be able to sit up there and relax and watch TV (especially when Sports Center is on the main tv...blah), but space is very limited in this second little living area. So, my question is....Does the chair look too big in the space and do you have any suggestions on what kind of chair/couch I could put up there that's reasonably priced? I was sort of thinking about getting one of those kinda inexpensive love seats that like pulls out into a twin size bed....but it's like foam. You know what I mean? I just don't know if they really make those or if I made it up, and if so, I really wouldn't know where to get one.....So, anyway, wanted to get some suggestions from the peanut gallery.....