Ideally a small room will have two sources of light, for example a pendant light and a table lamp. Make sure that the pendant light is not too low down.

A sconce (with a ceiling light) also works well. A sconce gives out nice, diffuse light so makes a great atmosphere and so suits small rooms.

Harsh shadows really bring out the small size of rooms, so ensure that you avoid these.

I think the most important thing is simply to make the lighting provide great atmosphere. For instance: not too bright, not too dim, and use warm white globes. Ideally all the ceiling lights should be dimmable.

Sconces are great because they provide lighting at head level, without using valuable real estate space that would be needed by floor lamps and table lamps.

For my small rooms, I put a floor lamp in one corner, facing inside the room. This lights up the rest of the room ensuring there are no shadows.

Make sure all lights are dimmable. Critical for small rooms, because the intensity of the lights is much more noticeable.