In 2001, I bought a cheap Ibanez acoustic guitar (made in Korea despite it's Spanish name) for around $400. I've never been very happy either with the tone or the action, but you have to live with your choices unless you're not too poor or cheap to buy your way out of them. I occasionally had it adjusted by Pasquale at Alex Accordion / Guitar, a small shop on Music Row, 48th street just off Times Square.
I had settled into a comfortable but not altogether satisfactory marriage with this instrument until September of 2007 when I took it out of the gig bag and noticed that the strings were sagging. I then noticed that the headstock had cracked at the bottom tuning lugs...
Looking around on the web, I saw mentions of $300 and up to repair such damage, which would have almost exceeded the value of the instrument. As I considered filming myself doing a Pete Townsend with it in the park, I took it down to Pasquele to see whether he could fix it and how much he'd charge. To my surprise, he quoted me $160 and when I returned later to drop it off, dropped the quote to $140 because the instrument wasn't a top-of-the-line guitar, which would necessitate a bit more cosmetic care. About three weeks later I got the instrument back, better than new because the reinforcement Pasquale added to reconstruct the neck actually made it stronger than the original construction.
Needless to say, I highly recommend this guy.