Now that you've pared down to the essentials, take a look at your furniture. Do you have pieces that serve more than one function? Double-duty furniture is essential to small space living. An ottoman can serve as storage for blankets; a sofa might double as a sleeper for guests; and a dining room table could sport removable leaves that convert to a desk when you're not eating. Add wall cabinets that hold your dishes as well as your office supplies, and you're heading in the right direction. Closets also make great offices, and the space under the bed provides ample storage. You get the picture.
When decorating a small room, you want to be mindful of scale, but this doesn't mean you need a room full of dollhouse furniture. While you don't want to cram a bunch of oversized furniture into a small room, one good-sized statement piece, like a couch, may be exactly what the room needs to seem like it can hold its own. The key is to be sure there's plenty of room to move around it. Also, how you position your furniture is just as important as what you put in a room. Sometimes putting a sofa at an angle rather than pushed up against a wall will make a small room appear larger -- and it also leaves some space for much needed storage behind it. It's all about the perception of space, so be sure to leave plenty between pieces.
How you decorate also has a big impact on how your space is perceived. While contrast is generally encouraged in a room to give it visual interest, less contrast will make a small room not seem quite so small. For this reason, white walls are best avoided. Try to choose a soft color that will blend better with furnishings and accessories. And speaking of accessories, the general rule of thumb for small spaces is to keep knick knacks to a minimum. That's not to say that you can't have some of your favorites on display, however. In order to not perceive a room as cluttered, the eye needs a place to rest. So groupings of your favorite tchotkes are a better option than scattering them throughout the room.