Ovations sound pretty crappy when they aren't plugged in. Their main use is as an electric/acoustic. If you're looking to save money, go for some of the lower priced Fenders. I don't know if they're still around, but Alvarez makes some really nice guitars considering the price is under $200. I have one, and I've gotten many compliments on it's sound, looks, and playability.
Don't buy a used acoustic, especially a cheap one. The wood is probably warped, or at the very least, the neck has been broken in by someone else's hand.
One of the main things to look for in a quality acoustic guitar would be it's top. You want what's called a "solid top". Look at the soundhole edges and if it looks like one piece of wood, then it's a solid top. If it looks like layers of wood stacked on top of each other, run away because it's plywood.