If you want to create a home office but only have a small room available, keep in mind that there's really very little you actually need in your office. For furniture, the bare essentials are a desk and a chair. Bookshelves are convenient but unnecessary; worse comes to worse, you can store reference books in another room. You can always place a hutch over your desk or affix shelves to the wall.
When it comes to hardware, prioritize according to frequency of use. If you use your printer often, keep it in reach. If you use your scanner and fax machine infrequently, consider keeping them outside your work area.
Utilize the space underneath your desk to store your CPU, your trash bin and a rolling file cabinet that can be pulled out as needed. Make use of wall space, too. If you don't have shelves on a wall, hang things from it. Translucent wall pockets are useful for incoming and outgoing mail, and they can free up space on your desk. A bulletin board is a good use of space as well. Office supplies like paper clips and thumbtacks can be stored in magnetic containers and hung from a magnetic strip on the bottom of a shelf.
Another important rule when you have limited space is to "build up." Don't let perfectly good air space go to waste. Purchase stacking bins and stack as much of your equipment as possible. If pieces of equipment have venting on the top, use chair-leg protectors to provide space between the pieces so they don't get too warm.
There are many ways to consolidate space and make an office out of even the smallest room. You just have to be creative and think outside the box!