I grew up in a very small house. About 800 square feet for 5 of us. But it never felt small to me. I loved my little house. I still take comfort in small spaces. My favourite quote is (wish I knew who the author was): "Better a small house one day than a big house all the year after". It kind of goes along with the whole 'green' movement in decorating. Why heat spaces you don't use? Right? It's really not practical to have spaces you don't use - you have to dust them too!
Small space decorating has its own challenges however. You have to be really organized - well, at least that helps. You have to think of every purchase you make to be sure you won't be overloading your space.
Check out www.apartmenttherapy.com. This is one of my favourite sites. I love that the houses are so real - not glossed over like perfect magazine pages (but I do love those too). There are tons of inspiring small spaces to view. Search small spaces and have fun on all the different house tours.