Drop the curtain! We are big fans of using curtains - or soft walls (as we call them) - to separate rooms in open plan apartments as well as to replace doors in front of closets or to rooms.
I just hung some curtains from the ceiling to divide the space in my loft. I used the new DIGNITET hardware from Ikea and had pretty good luck with it, and I like its clean look. It comes with 197 inches of steel wire, which you cut down if you don't need that much (best to have some fairly burly wire cutters on hand).
Similar to the turnbuckles mentioned above, you turn a threaded rod with a small allen wrench (included) to create the right amount of tension on the cable. The only problem I ran into, is that I used drywall anchors and screws to secure it to the ceiling. But the anchors aren't really adequate for this application so I can't get quite enough tension in the cable (or the anchors will just pull out of the ceiling). So I might have to redo it with stronger anchors. But the hardware itself seems very strong.