JMO, jym, but I would pay to replace the carpet. I'll let others comment on whether to replace with carpet or hardwood, as I have cats and we live in New Orleans, so I don't do carpets. I've seen some nice marble looking tiles at friends' houses who've redone their floors, and it looks gorgeous. I would recommend putting hardwood in the den, but I don't know if you'll have a matching problem, since you already have hardwood in some rooms.
Before debating spending the money to update that one room, think about how much two years of insurance and taxes would be on the house. If it costs around that, or less, to replace the carpet, I'd do it.
I agree that people want move in ready. We bought our house right away just based on the fact that we could move right in. There was a lot to do outside, but as long as there was paint on the wall and floors on the ground, we could move our stuff in.
We also loved the wallpaper in our house when we bought it, and have never replaced it, 22 years later, and buy artwork and sofas to match it, as we intend to keep it the way it is as long as we're in the house.