I've been stabbing at cheap acoustic products lately and do not have a good methodology guideline. I'm hoping Bruno will chime in with recommnedations on a good book or other recommendations...
I've used his advice and others and come up with a happy medium. I have some 8th Nerve 'corner' products that I bought but, also,
First: (materials cost under $100)
I made molding that goes up the corners of each wall from floor to ceiling. I attached fiberglass insulation to the back and then bolted into the corners.
Second: (materials cost under $100)
I made tiles and hung them on the walls. *huge improvement in lowering reflections* I used 1 4'x8' piece of particle board, 4 stiff fiberglass ceiling tiles, some nice fabric, and a staple gun. I have 4 panels that helped kill primary reflections and deaden the room a bit. It was too lively.
Third: (materials cost $125)
3-panel room divider. I bought a cheap oriental room divider with little wooden squares and rice paper and filled the panels with Volara foam and then put fabric over the foam. Serious improvement in imaging.... It made a reflection barrier in an opening in my room.
Fourth: (can't remember cost but, probably $200)
Rug from Lowes.. I got one of those really shaggy type rugs... lots of surface area for diffusion. It has no pad, though.... I didn't want to over-absorb.
I think it sounds extremely good considering the room is only 11x12, is hardwood, and has a large opening to other large reflective spaces.
Good luck,
Carl