Functional as well as decorative. A great idea especially when working with a small space is to select items that make great features yet also serve a purpose. For instance chaise lounge chairs are great not only as lounges but they also double as a place to put your feet up and provide extra seating when you are entertaining guests.
Choosing furniture is an important part of getting your living room just right. The items that you choose should be coordinated with the colors of the walls and floors in the room but thought also needs to be given to how to mix and match pieces of furniture for the best finished look.
To give a concrete example you could choose to keep a contemporary theme with plenty of black and white colors modern materials and a few pops of bright blue. With this in mind a glass TV stand a glossy black living room set a chrome and glass coffee table and some bright blue accessories or modern art on the wall could look fantastic.