I live in a 2br flat (probably 500-600sq ft?), and I have mine in the corner of the lounge. It's pretty much out of sight, and out of mind unless my cat is busy flinging litter around. I clean it out every morning, and if I notice it, in the evenings as well.
I would've preferred to put it in a closet somewhere, but knowing my cat, he'd just end up getting litter all over my clothes, just for fun.