Kristin, Could you say a little more about what isn't working for you with this space? Do both kitchen and living room feel "cheated"? Trouble blending decor in both? Desire to separate the two spaces decisively while retaining logical aesthetic connection between the two? No flow? etc. ... Thanks!

what about a free-standing shelf that could act as storage and a room divider in the middle?

You can add a free-standing shelf as stated above or you could also move the sofa so that the back faces the kitchen and then add a shelf or a narrow table behind the sofa so that you are not looking at the back of the sofa.

A few suggestions I saw when looking at your pics..
Get rid of all the mish mash stuff. Too much clutter. Eliminate that stuff on dinning table..One centerpiece, i.e.
a water pitcher with sunflowers, or a huge oversize bowl with fruit.
Brighten it up with big bold colors.
Instead of those little paintings or pics..Try one big piece of artwork painting.
A low round coffee table and huge colorful pillows around it for seating and lounging.
Paint that brown wall off white.

Very rough sketch of current layout
http://img98.imageshack.us/img98/7631/at1ad7.jpg

I have to do that every time I rearrange furniture majorly.

I'll see if I can think of some layouts for you. I love rearranging furniture!

I always hate this kind of layout: the landlords run the kitchen down one side of the wall, turning the whole space into a glorified kitchen. This is actually worse, because your space has the kitchen in a corner, taking up two walls.

Placing an island where the 'wall' of the kitchen would sit will help: it will block the visual clutter of the kitchen and make it feel like a separate space. You might want to replace your table with an island and stools, or just place it flush against a narrow island.

Using the sofa as a 'wall' will help too: you need to set things up so that you don't have to feel like you're living in the kitchen.

here's another tip... get out of the stone ages and stop using dial-up... holy crap that phone line to the laptop just makes me want to cry! i like the wall colors, but the sofa color throws it all out of whack, maybe invest in a sofa cover (light colored to blend more with the environ. i agree on the idea of having it backed up to the kitchen, with a shelf behind or something. do you need a square dining table, you could definately save some space by getting a round (with a leaf for bigger needs) one and popping it closer to the wall. another thing besides the rest of the clutter would be to re-think the trashbag situation. ikea has some decent plastic options, and everyone else seems to carry the stainless foot operated kind. i recommend that for sure!!! you're overflowing already. buy a flatscreen TV and pit it anywhere, nothing like a big tube to force you into that tired "tv in the corner" look. it also looks like you have all tile (linoleum?) try a BIG colorful area rug that maybe encompasses the "living room" side. that may add a sense of delineation as well, at least visually. hope that helps. let us know what you end up doing.

http://img237.imageshack.us/img237/3664/at1bdp2.jpg

How about turning your table and the rug it's on around the opposite way (so that it's parallel to the kitchen wall rather than perpendicular)? Then get a bright, bold area rug that is large enough to cover the whole "living room" area.

The rugs will help visually separate the spaces and cover that funky flooring/give you a chance to show your style.

Turning the couch so that the back faces the dining area is a nice way to separate things as well. For the shelf on the back that everyone is mentioning, the Expedit from Ikea might be a nice option (and not too price) -

This size could be nice (laying on it's side rather than standing as pictured):
http://www.ikea.com/us/en/catalog/products/50103086

Or this one - which would be more like a room divider:
http://www.ikea.com/us/en/catalog/products/40047675

And while you didn't ask about this - that corner in the living room where the shelves and floor lamp are now would be a great spot for a little office set up!

good idea about the office set up, Boston brit!

ubertimmo: flat screens aren't necessarily much of a solution in apartments. The cords hang down (since you can't drill and hide them in the walls like you would in a house). Any peripherals (DVD player, stereo receiver, game consoles, etc.) are still as deep as old TVs and apartments don't come with ATV closets.

Between the two, even a flat screen TV is going to wind up in/on an entertainment center taking up nearly the same amount of space and focus as the old TV.

It's hard to answer without a floor plan, but I would first get a larger, bolder rug for the living room area. It should fit under the front feet of both your sofa and chair, and will define that space better. Then I would get a piece to separate the kitchen/dining from the living area.... I can't see how much space you have there, but it looks like you can push your dining table back towards the wall some to make more room. I would get something low (desk/table height) and shallow, move the sofa over to back up to the new piece (bookcase? credenza?) and put a matching pair of tall-ish lamp on it. Run the cords under the rug/furniture to an outlet (you'll need an extension cord, and you should wrap the connection between the cord and extension cord with electrical tape, for safety).

How about hanging a curtain flush with the side wall of the kitchen, so you can block it out of view? It could either stretch across the entire view or it could be fixed so that there is an uncurtained entrance on either or both sides.

Then you could bring the table flush against the curtain from the living room side (although you'd be sacrificing one of your 4 sides. The bonus is when you need to seat 4 or to open up the space, all you have to do is push the curtain to the side.

You could still run your phone cord to the table (actually, get a really long phone cord and tack it up the wall, across the ceiling and let it drop down by the curtain so you can get rid of the lethal trip-wire effect. Let the curtain hide the cord.)

The living room really needs a defining carpet on the floor. You could leave your basic layout like you have it, but you need a carpet large enough for your sofa and chair to be sitting on it.

I think you need some sort of bold defining artwork replacing the two little bits on the wall by the sofa. And it needs to be positioned central to the space created by the sofa/chair arrangement.

I'd also move the bookshelf from where it is to the other wall so that it runs parallel rather than perpendicular to the sofa.

Finally -- and I'm a big culprit with this one too sometimes -- no matter what you do with the space it won't look good if you've got cardboard boxes etc in the space. If these are just there in this picture than forgive me, otherwise I'd urge you to find a way to store those sorts of things more attractively.

I would either cover the table with a cloth that was closer in color to the kitchen cabinets or get a different table altogether. I think the difference in colors adds to the disharmony.

To jumpstart the change, take off the little magnets and doodads on your fridge. See if leaving the refrigerator surface bare improves the space for you.

Or replace all the small stuff on the fridge with one or two large "art" pieces.

Let us know what you do!

i like lizzykewl's lower right drawing.