Paint the walls a bright color, and make sure the light fixture has several settings. You’ll want to increase the lighting, not dim it, to make up for the limited wall space. Paint the ceiling a different -- but not clashing -- color.
Install a hanging ceiling fan, beams, or some sort of decoration to direct people’s eyes up to the ceiling. You want to attract their attention to the intriguing variation of ceiling height. Beams can also give the room a cozy feel.
Buy a short bookshelf or install two or three shelves on a short wall if the ceiling slants down. You can store books, CDs, or display items and make good use of this space.
Hang a mirror or two -- make sure they are a good proportion to the height of the wall -- if the room seems too small. Mirrors reflect light, which makes a space feel larger. If there are paintings or photos, choose a few large over many small ones.
Position the furniture or any bookcases so that there is as much open space as possible.