Do double-duty. It's all about flexibility when you're working in a tight area. Look for furniture that can multitask, like side tables with drawers or shelving underneath that provide extra storage. We sometimes suggest skirted file cabinets to our clients that can be used as console tables, and in our own home, we have chests of drawers on either side of our couch that hold our four year-old's toys. Stools are often underutilized but so useful. They work as extra seating, or as a cocktail table, or to rest your feet; plus, they're very mobile and compact.
Air it out. Negative space is what creates a sense of serenity and spaciousness. This applies to any surface your eye moves across. If you're looking at a wall that has media center, side chair, lamp, and artwork against it, make sure each object has room to breathe—otherwise they'll start to overwhelm. The same rule applies to a furniture floorplan or even objects on a side table. It's better to create clusters or vignettes rather than spread your belongings everywhere.
Tame the clutter. Editing becomes even more crucial when you don't have a lot of room. Attractive storage is always a good thing, though it also has to be easy to access or you won't use it. We're big on baskets for organizing things like throws or magazines or toys. Covered boxes are great for taming piles of paperwork, and look nice interspersed on bookshelves.
Don't be afraid of the dark. Certain colors are better for certain types of rooms, irrespective of size, though if you're short on space, it's best to stay relatively monochromatic. Dark colors can actually expand the feel of a room, and are great in dens and bedrooms, so they're more cozy and atmospheric. For daytime areas, a lighter scheme may be more comfortable, though even in a bright space you always have to throw in a dark component to add depth and keep the room from looking washed out.
Make it shine. Light-reflecting high-gloss paint can make a room feel bigger, but it's expensive and tricky to achieve, since your surface needs to be primed and perfectly flat as not to show imperfections. Wall mirrors are an excellent substitute to get a similarly sparkly effect, especially paired with polished accessories in chrome or lacquer.
Create a glow. We tend to avoid overhead or recessed lighting, which is not only unflattering on your face but draws walls in. We like the soft, ambient pools of light you get from lamping, which also helps train your eye out to the perimeter of a room. Mix things up with shaded table lamps, metal floor lamps and picture lighting. Uplights can also give a sense of a taller ceiling, and they're discreet, since they don't register as yet another fixture.