Used to do a lot of upholstery myself but only arm chairs never a sofa. In general it is worth re-upholstering a suite if the frame is a quality frame if not then its good money after bad. Look in you local phone directory for a local decent upholster and he will come and have a look, give you a quote and tell you whether the suite is worth it. I am certain he will also have a workshop and be able to show you some of his work.
Some of the online sofa companies have excellent deals 3 years ago I bought a sofa bed for a playroom from Divani for about Ł250 and it still looks good. The service was excellent and when it arrived you were allowed 3 weeks to consider whether it was for you and send it back if not by just calling them up.