Your first inclination might be to arrange all your furniture flush against the walls. Though this may add a little extra room to move through the room, it'll make everything feel more crowded and congested. Instead, try arranging items at an angle, or pull them six inches away from the wall.
Dark paint will make the room feel smaller. Instead, opt for whites, light grays, and other light colors. A well-placed mirror will also expand the room's appearance-think of the times you've been in a restaurant and a mirror made the space look twice as large.
Look for storage everywhere-you can keep books and DVDs inside an ottoman, or store blankets in a bench or hollow coffee table. If you don't have room for a dining table, you can invest in a coffee table with a pop-up section.
It's common to hang your curtain rods just a few inches above your windows, but to make the ceilings appear taller, you can hang them just a few inches below the ceiling. It can have a dramatic effect.
The sofa is likely the biggest, most unwieldy item in your living room. What if you swapped it out for a settee or a pair of comfortable chairs? You won't lose much in functional seating, but you'll gain some precious space and room for foot traffic.