"I live in the smallest house in Arlington. It has less than 500 square feet," says Kathy Dodd. She and her gray tabby moved into this Arlington, Va., rental this fall, and she has had trouble arranging furniture to make the most of the 10-by-12-foot living room. Dodd wants to use the room primarily to watch TV from her couch and work at an oversize desk her dad built (though she's open to buying new furniture). She wants to keep the room light and airy. Because she's renting, she's limited to repainting and redecorating.