I live alone in a 4-bedroom house and it's still not big enough! Here's how it breaks down:
Formal living room - kept clean in case someone comes over. Since it has the best light, used to check colors (i.e. is that thread black or navy???)
Dining room - only clean flat surface in the house, so kept clean for emergencies (like eating)
Kitchen - Island is the perfect height for cutting, so I keep a large mat nearby with rulers and a basket of cutters, etc. Kitchen table is where I keep a machine for quilting, since it has the table to support the weight of the quilt.
Family room - I have to clean this room anytime I need to lay out a quilt to be basted, which I do in the middle of the floor. This spot gets vacuumed occasionally for this reason.
Bedroom #1 - Officially referred to as "the guest room", this is where I keep my bins of yarn and knitting supplies and pictures that I'm someday going to put into a scrapbook.
Bedroom #2 - Officially referred to as "the library", this is where I keep my quilt books and magazines, along with gift wrap supplies and grandkids' toys.
Bedroom #3 - Officially referred to as "the sewing room", this is where I store my cotton fabric, projects bins, thread, ironing board, tools, scrapbooking supplies I'm going to use one day and miscellaneous. The cutting table is where I stack current projects, so finding something is like an archeological dig: the depth of things indicates the age of the project. I also have my serger set up here, along with the other sewing machine, for quick fixes.
Bedroom #4 - Known as the "master bedroom" or "my bedroom", this is where I keep my quilts, the fabric that is not cotton, my computer and printer, oh yes and my bed. Master bathroom has walk-in closet, where I keep all personal effects such as clothing, jewelry, and where I stash my quilt guild Secret Pal gifts.
Moral of the story: quilting stuff expands to fit the space available!