budget issue
I think what you end up doing will come down to two main factors:
how much you have to spend, and
how picky you are about your final acoustics.
For myself, I know that when I setup my studio it will be bootleg no matter where I do it in my tiny home. I really only have one option, the 'living room'. Once I'm in my final tweaking stages I'm sure I'll need to buy a few pads of acoustic foam, but given the temporary nature of this arrangement and that fact that I've basically already blown my budget buying gear my acoustic treatments will primarilly consist of:
Bass Traps: a 4 1/2' stack of old magazines in a corner. Also, I have a heavy cinder-block style "bookshelf" to go along the short wall behind the "control area" (it's not a room unto itself.) Not scientific, but these masses should help out.
Higher-end: The walls are lined with DVD-racks and bookshelves, which absorbs a lot of the mid and high frequencies. Also have one wall that slants outward which helps to diffuse anything that's still reflecting.
Once everyhting is setup I don't anticipate needing a lot more acoustic treament that what's already in my living room. Like I say, probably a couple strategically placed pads to suck up stray sounds.
If you have the budget though, by all means check out the Home Studio showcase (I'm forgetting the URL right now, but if you spend much time around here you're sure to stumble over it) and see some of the amazing home studios that others have built!
-Shaz
