Wall mounted shelves above other furniture.

When I lived in a really small basement this was a lifesaver. That way you can have a couch and shelves share the same floor space (which is at a premium).

First of all you have to get organized. If you are not organized living in a small space is gonna be impossible.
If you are organized and still have to much stuff........you
actually have to much stuff so you should downsize.
Ask yourself what do I need for my daily life, then what makes me happy................and the rest of the things that you didn't think about: you can live without them. If you don´t believe me pack everything you maybe don't need in a box and put it in storage for 6 months. If in 6 months you didn´t need anything you should schedule a garage sale or donate it.
I think that´s the first step and then of course stop buying what you don´t need.

Get rid of superfluous items. Use the "1 in, 1 out" strategy. Be honest, will you ever reread all 300 books on your shelves? Probably not, so weed out the ones you don't like a lot. Buy a bed with storage (whether it has drawers, a space underneath, or raises up on lifts). Use a pot rack. Small wire racks are great for storing everything.

I have lots of bits and pieces crucial to my crafting and gardening to store in our small house, and recently wrote a post on how I came to organize them in repurposed jars that I engraved and nailed to the bottom of my shelves. It's a littlel storage strategy that looks good, and solved my problem:
http://www.fuoriborgo.com/fuoriborgo/2010/02/underspace-in-a-small-house.html (published also by whip up)

Cup hooks of different sizes EVERYWHERE: I use them for pots and pans, oven mitts, purses, hats, jewelry, coats... basically everything. They're inexpensive, don't take up a ton of space, and keep things off the counters and floor.

While it's already been said, unquestionably vertical storage and built ins. Shelves are pretty easy to put in and increase functionality by a lot. Also, small appliances and small pots and pans make a huge difference.

Go for a fairly neutral color scheme, involving shades of the same color (with a few pops)... I did photoshop mock-ups of my new living room both ways (with lots of contrasting colors, and with mostly shades of neutrals) and I was surprised by how much larger and more peaceful the neutral version looked.

Make sure that everything has a place. Keys, scarves, remote control,magazines, etc...it makes straightening up a messy place that much easier. This may be obvious to many, but I never really gave it much thought until I had a tiny space of my own.

If I find a spot seems to attract clutter, I devise a shelving or other type storage solution to contain it. I did that in a little corner of my kitchen, installing a tiny shelving system that would hold just the clutter that accumulated by the back door.

I used my dining space as an office,and kept a folding card table under my bed to pull out for dining with friends. Just throw a tablecloth on it and it's instantly a dining table!

Honestly, the best tip I have at this point (having only had my own place for about 8 months now) is, if you have enough space, leave an area that doesn't have to be cleaned. We are lucky enough to have an office/computer room, and while it still needs work, it's so easy to just put extra stuff in there. It eventually gets put away/sold/organized, but for straightening up the main living space(s) it makes everything easier. Plus it is just refreshing to have an area I don't stress about! I know lots of tiny apartments don't have this luxury, but for me it's worked well.

Choose "light" furniture that you can see through and under, like shelving units with no back boards and sleek chairs that you can see under (no LazyBoys, for example), so the furniture won't encumber the spaces and the room will remain light and airy.

Legs.

Choose upholstered and casegoods with legs that give them floor clearance. Air -- or negative space -- provides the visual illusion of spaciousness. I learned this tip reading AT and put it in into practice. It makes a huge difference, whether you have a small space or a spacious abode.

I'm going to disagree with the decision to go neutral. A small space looks just as good with a bold color scheme because it provides some 'wow' - and if you don't have very much light in a small space, dark colors hide corner shadows.

What I think is important is to have a COHESIVE color scheme.

Keep things organized. Reduce the clutter and purge. Get creative with storage. Purchase multifunctioning furniture.

-Keep what matters and get rid of the rest. You'd be surprised what you can live without in a small space.

-Can't part with your stuff? find a creative way to reallocate your furniture. Buy a ottoman with storage inside the base. Jack your bed up and store off-season clothing.

-Got a large music collection? rip your CDs to a secure and reliable hard-drive and sell off your albums. If you're a vinyl fan, make sure that ottoman can handle 13" x 13" :)

Loft beds! My craigslist purchased loft bed turned a tiny bedroom into my office, yoga space, closet & bedroom!
http://craftscafe.wordpress.com/2010/02/01/before-after-chest-of-drawers/

Anything I don't use daily gets put into under the bed storage boxes.

When I finish a book, I immediately post it on paperbckswap.com to get it out of the house.

Shelves above doorways - my "linen closet" is really baskets on a shelf that sits above my bathroom door

Multi-functioning furniture: My sewing machine is built into a side table, and my ottoman hides all my sewing supplies inside. It also happens to fit perfectly under the sewing machine when not in use.

And my "cheat" - I bring off season clothes home to store at my parents' house until I need them again

The best resource I have found for small spaces is CompactAppliance.com! The site name says it all, right?

I don't live in a super small space most of the time, but when I travel in my family's RV the ice maker and dishwasher from this site have been amazing.

Humans by nature accumulate possessions, therefore I think the key to successful small space design is maximizing existing storage. Yes, one can try to perform regular cleanups and purging to reduce the amount of their stuff but it's a time consuming and potentially emotional process. Therefore one is better off making sure they have enough storage space rather than engage in a potentially negative process. Solutions I'd like to see examined are:

Increasing closet, drawer, or cabinetry density by installing organizers while examining which organizers work best for common items needing storage.

Creating innovative storage structures in usually overlooked places.

Creating storage in unusual places.

Innovative storage solutions for common hard-to-store items, i.e. bicycles, stand mixers, vaccums, etc.

Rethinking conventional storage systems to make them more efficient and provide greater capacity.

Rethinking the design of rooms and/or the selection of room furniture to create greater storage.

John H, l disagree. Purging clutter is a good chance to let go of the past/negative energy/etc. There is also a reduction in the stress of living in a cluttered space and feeling guilty about the waste it often indicates. There are health benefits of living in an environment that is easier to clean and maintain, which affects allergies, bacteria levels, pest problems and air quality depending on how bad the clutter is. No one benefits from avoiding things they think are unpleasant when that leads to staying in an unhealthy situation.
That said, it is certainly true that living in a small space requires lots of creative organization, and I think your ideas for that are good.

1) one in, one out. 2) store high and under

Furniture layout and scale are super important. To get the most out of our tiny rooms I measured the rooms and laid them out on graph paper including all the things I can't put furniture in front of (doorways, etc.) Then I measured the furniture and cut out little pieces of paper furniture to scale. Someone said you only need 18 inches of clearance to get around stuff. Having a good traffic pattern goes a long way towards making a small room workable. I played with the arrangement on paper until I figured out what worked best and I was often surprised by what arrangement really worked. And use the corners. Don't let the precious space go to waste.

If you are able to, get the right size furniture. We originally had a long couch that really didn't work in our living room (I had to put it on the diagonal.) Later on, I had a small sectional custom made at The Sofa Company and it's the perfect size. The layout of the room is much better, we have more seating, and more usable space.

I'd echo many of the posts above but also say this - if you tend toward collecting - then ROTATE your collections in order to keep visual clutter to a minimum. Your space really feels larger when there's less visual clutter. Have seasonal boxes, that you keep in storage or under your bed, and group your collections into seasons (or months). Rotate some of your artwork, knickknacks, memorabilia, add an orchid or fresh flowers seasonally - and - your small house will always feel like it's living large. I inherited many collections from relatives, kept what I loved and auctioned the rest for charity, but the ONLY way to keep anything in a small space is to rotate it rather than display it all simultaneously. In some cases it's as small a collection as a grouping of animal carvings done in amber. They come out for Autumn, lined up along the fireplace mantel, but come Christmas they're back in the Autumn box until next year! (when they seem fresh & new again)

I like using mirrors or any reflective surfaces,and adding in light sources for the light to bounce off of.Anything to give the illusion of added space is great!I also try to "purge" as much as possible, but with decorative things that I love/have sentimental value, I decided to buy a cabinet to showcase them into collections. This way I can see them without having them scattered throughout my space and adding visual clutter.

I actually have skirted furniture because it means I can keep my impossibly large drawing portfolios beneath them, along with canvases and papers for painting/collage. Shelving was added in the closets above the existing shelving, and I brought in 3 custom book cases to hold books, (yes I actually do reread those 300 books, many of which are professional references; the others go to Half Price Books) that hold linen-covered boxes for files, DVDs, CDs, etc... Putting the information storage into boxes keeps it from turning into visual clutter. I also have a desk with a fabric skirt and a glass top so I can hide a rolling cart with art supplies, printer paper/cartridges, etc... Everything hides away easily, so I can be calm and collected, but still know where everything is. I used to hoard things and collect needlessly, but I've learned I'm much happier with a few well-chosen objets d'art than with gobs and gobs of "stuff" I don't need.

I like realizing I can use something for a different purpose than it was intended. I hung one of those clear over the door shoe pouch things on the back of my front closet door, which is right next to my kitchen. I keep everything I can in there...tea bags, soup packets, spices, I put noodles in plastic bags and shove them in there, napkins, dish towels...it has been so helpful in my tiny tiny kitchen.