This is how I decorated my otherwise boring dorm room last year.
The "Perversity" poster is actually a cover of a pulp novel that I put through the Rasterbator (and can I just say hallelujah for the Rasterbator? That thing is awesome.) I did two other similar posters, but that one was the coolest. On the right, I covered that entire wall in small pictures I cut out of magazines, posters, postcards, coasters, guitar picks, anything I could find that looked good. It made the room look smaller, as large dark masses on walls will do. But I made sure there were a lot of mirrors and light sources to offset that.
I've done the same thing with my room this year, and I added some awesome maps (can you believe some yuppie boutique was selling gorgeous, vintage-style maps as wrapping paper???
) and two globe lanterns above my futon/bed.
The reason I added the globe lanterns was because I felt like there was way too much open space between the ceiling and my mattress, and it just didin't look right. Adding the lanterns actually worked out really well--they're pretty when they're on, and they balance out the space when they're off.
Also, for you craftsters looking to add some color to bare wall space, you might ask your local independent music stores if they have any posters they're looking to unload. A lot of times, record labels will send retailers posters to put in their windows. You can pick up some pretty rad stuff for cheap or free if you ask the right places. I peeked in the "free posters!" boxes of my favorite record stores for three months, and found posters from M.I.A., Spoon, Neko Case, Missy Elliot, Jesse Sykes, Mando Diao and Hank III.
Next year's dorm room is gonna be even cooler! I can't wait!