When it comes to the home your bedroom is really important to you. It may not be important to everybody else but it's important to you, because you're sleeping in your bed. Now headboards to me are the main event in a bedroom, why? Because when you walk into the room the bed is really the first thing you should see. It shouldn't be tucked away off to the side. It should really be the main event.
You can go with a very low-profile headboard, one that's really simple and modern and says, "Hey, I'm not here. Ignore me." Or you can do something built in and just take a couple pieces of molding and frame out a nice headboard. You can paint inside of it and make it as big as you want. Even in a small bedroom, it can be a beautiful backdrop to pull up some nightstands and some lamps on either side.
You can put up a big piece of artwork and call it a day and that acts as your headboard. You can even use fabric. Hang a rod on the upper portion of the wall behind your bed and hang fabric drapes behind it, and then that acts as your headboard. What I love about this is that you can be as creative as you want. You can use artwork. You can use window treatments. You can use molding to create the headboard that you want.
Also, paint is the most inexpensive thing that you can use. You just paint an accent wall. Even painting out a little square right around where your headboard would be and then voilà, you have your own homemade headboard. So don't think that just because you have a small room, that you can't go for a large headboard. It'll make a big impact and it'll make the room feel warm and cozy when you get into bed at night.