Cheery yellow w exposed wood from Country Living. I like the floral wallpaper on the accent wall, the iron bed frame, and the built in shelves maximizing space. Although I would remove the boring beige carpet - looks like beautiful hardwood underneath.
Similar yellow floral wallpaper at Laura Ashley:
Eek! Too modern, but I really like how the bed continues into seating and a dining area. See the following image (AT SF house tour in Oakland) of a platformed bed. What if you filled an entire end of a narrow room with a platform? Elevate the bed. Queeste Architecten