Love this thread! I live in a two-story condo, approximately 1,000 square feet. Like SingerSewer, my "master" bedroom (which was my mom's room until she passed away in 2012) is now my sewing room, and I sleep in the smaller bedroom (in which I also have a small office space).
I have tried numerous times/ways to move my sewing space downstairs, but it has never worked out well. I have an eat-in kitchen and a living room on the first floor, but the problem is closet/storage space; there just isn't enough to fit all of my sewing accoutrements, so I would have to constantly run up and down the stairs to get things. I do, however, keep my Featherweight downstairs so if the mood strikes (and it often does), I can sew while watching TV at night.
The master bedroom has plenty of space but my problem is lighting. No overhead lights and the two windows are down at one end of the room (it's long and narrow) and my sewing table only fits at the other end of the room. But I work it out.
Just recently I moved all of my knitting/crocheting stuff and yarn into a downstairs closet off the kitchen. So the upstairs room holds all of my sewing things, plus a closet full of stuff for scrapbooking.