I have a 1500 sq ft shop with 21 foot ceiling peak... and use my fluorescent lights for heating... but if it really drops in temp like down to 30 degrees or so I will add a rather smallish 220V electric heater I bought at Grainger.
It wasn't "cheap" as in Taiwan built stuff they sell at Home Depot etc - so is more "industrial" - but I didn't want to risk burning my shed down either...
Here's a link to the one I bought.
http://www.grainger.com/Grainger/items/3VU36?Pid=search