Lighter color painted walls.....grey seems to be the rage lately!
Paint your walls a light shade and mirrors are great tools to make a room appear larger. Want more tips on how to make small spaces look bigger - Visit http://bit.ly/rqmJiE.
Haley, what room is this? Do you have a picture?
A few pieces of well selected furniture instead of lots of small pieces that clutter the space. Light colored walls recede and make the space feel larger. The use of mirrors gives the illusion (by reflection) of a larger space, a wall of mirrors is a great idea. Also, built in storage with furniture incorporated into the design, such as, a custom built wall unit that has bookcases and a window seat or a desk. This provides practical furniture and saves space.
Lee Anne covered everything perfectly. I would like to add that we sometimes have/keep too many sentimental possessions.