Tim,
Good choice, and you should easily get a nice one below £1000.
Seen this? £300 and needs maybe £500 spent to make it very nice.
http://www.volvoforums.org.uk/showthread.php?t=202652
If you want to see a collection of sporty modified 240s, try to come to the Retrorides gathering at Shelsley Walsh in August. Mine will be one of several on a stand that Antz has organised.
John