In the November 2006 issue of Saveur: Savor a World of Authentic Cuisine, is an article on a couple coping with a really small kitchen: Small Wonder ("This diminutive kitchen has everything a cook could want.")
Actually, I don't think so, but they live in an apartment in Manhattan, which they remodelled. They use frosted glass cabinets to add depth; and Plexiglass covers part of a remaining wall to suggest greater space. They have only the basic small appliances, including a blender and a half size food processor. Cutting boards on the stove give them more counter room, and they prepare ingredients on a large table in the living room. They have a narrow fridge, so they buy fresh produce daily, and they buy ingredients that come in small packages. They cook in shifts in the 24" Verona oven, and for large parties, they serve hors d'ouevres and simple snacks, though they cook full dinners for small groups.
It sounds as if they do more entertaining in their little space than I do in my big kitchen (which I'm grateful for)!