When you have a dining room, throwing a dinner party is a no brainer. Set the table and you're done with it. But, when you have no dining room, your kitchen's tiny and your living room is your only option, you've got to great creative (see How to Fit a Dining Room Into a Small Space). Which is exactly what Loving Living Small did when she threw a dinner party!
- Let the coffee table double as the dining table. Guests can make themselves comfortable on the couch or sit on the floor.
- Instead of crowding the table with bottles, set up drinks at a convenient spot nearby. Ice and glasses mean that guests can help themselves.
- A folding table or an ottoman with a tray on it can hold extra food (or a panini press!)
- Go vertical: use a tiered serving piece, stack cake stands or improvise by stacking plates and glasses.
- For a "sit down" dinner party, keep the guest list small enough that everyone has a spot to sit.
- Consider fork dinners that don't require a knife if you worried that some of the guests may have to eat from their laps.
- Use cloth napkins. If food spills, cloth will catch food and prevent a disaster better than paper.
For more of her tips, see Loving Living Small | small space panini party.
Images: Loving Living Small
MORE SMALL SPACE DINING TIPS
How to Fit a Dining Room Into a Small Space
8 Secret Spots to Hide Valuables at Home
The Live/Work Studio of Robert Siegel Handmade Ceramics
Good Food to Share 
The Big Book of Small, Cool Spaces 
Apartment Therapy Presents 
The Eight-Step Home Cure 
Howard Butcher Bloc...
Why I Rent Apartments When I Travel
Recipe: Chopped Brown Rice Salad with Grapes and Pecans
When I have my housewarming party, I plan on going tapas style, but a panini party sounds fun, too! I have a dining table large enough for 8, but my dining room is much to small for it - the leaf is in my closet and it's pushed up against the wall to make walking room so you can get to the rest of the apartment. It will probably work for 4 people, but not any more than that. Great post! Using the coffee table looks so cozy!
Or take it outside to a deck if you're lucky enough to have one and be in a warm clime.
One thing not mentioned is not everyone has to sit right next to each other. Here I have a combination of seating - four people can sit at the kitchen table, two more can fit at the breakfast bar, and depending on if it's children or adults 2-3 people could easily eat sitting on the floor at our coffee table. Sometimes conversations flow better when everyone is crowded in one spot.
@davebarnes: ;-)
Yes, small children occupy less space when they are still. They occupy far more space when they are moving (and they are always moving), and tend to leave marks -- on walls, on floors, on the host, on the cat...