First of all, paint the walls white to give the room some more depth. Create a central sitting area with sofa sets encircling a center table, and go in for vibrant upholstery to set the mood right. A pair of sophisticated recliners further adds to the charm of your relaxing zone. Or else, you can also go in for a large bean bag. 
For study table and book shelves, make use of the walls and the corners intelligently. Opt for furniture that have sufficient built-in storage space. An all-inclusive wall cabinet not only solves your problem as in where to fit in your idiot box, but also serves the dual purpose of storing your books as well crockery.
Now for the kids, accommodate their small study table with the built-in blackboard in one corner of the room. Else, just make space for their piano if you think a table for kids would add to the clutter.
Let your lounge flow freely into your dining area. Just erect a standalone wooden showcase to create a partial divide. Or, you can place the dining table along in the passage that leads up to your kitchen. It is a great way to use available floor area effectively. Be wise lighting wise. Hang in some beautiful pendant lamps and wall sconces to highlight the specific areas.
So, now you have a perfect living room area to revel in. Live, make fun, and have a great time! After all, a family that jives together stays together.For some more ideas, refer to IKEA 2010 Catalog.
