1. Seating: You need to have plenty of seating. It is a rather unwelcoming feeling when you come into someone's home, and they don't have anywhere for you to sit. Then there is always the inevitable search for uncomfortable fold away chairs that will sit awkwardly in a strange corner of the room.
You should devote as much space in the living room as you possibly can to couches, sofas, and love seats. If you plan to entertain a large number of guests, you might want to compliment these with some comfortable occasional seating, such as been bag chairs, or sofa cushion floor seating. You can also use comfortable dining room chairs as a more solid alternative.
2. Clutter: A room that is full of useless junk will feel chaotic and uncomfortable. If there is garbage everywhere, then you are just being lazy, and this will reflect on you whenever someone comes over.
On the other hand, it might be that you are just a little too enthusiastic about decorating, and so you have crammed every cute, beautiful, or interesting thing that you could fin into the space.
What you have to understand is that decorating is a form of art, and art is about making choices. When a painter starts a portrait he has to decide what he is going to paint. He can't paint everything in the world, and you can fit everything in the wlorld in your living room. In general, simple is better, because it gives you a blank canvas to fill, slowly with decorations.
3. Circles: The living room is a social space, and you should do your best to facilitate this. Create a circular pattern to all of the seating arrangements, which forces people to look at one another, rather than a focal point such as a TV. This makes conversation easier, and almost inevitable.
4. Pathways: One of the basic rules for decorating a living room is that you have to position items in such a way that there is a flow to the space. That means leaving clear walkways open for people to move into, out of, and through the space. You want the room to have a natural fluid feel that makes it easy for people to travel through whenever they have to.
5. Interest and Comfort: Everyone wants to have the most interesting interior. The problem is that sometimes interesting is bad, it can even be offensive, or tacky. Since the living room is such a social space, it is on public display, and the decisions you make here will be judged by anyone who enters the home.