Layout that matches your lifestyle makes all the difference. We have an embarrassingly large house for just two people (nearly 3,000 sf with the finished walk-out basement). About a third of the house just doesn't get used much. We bought it because we liked the location and the rock-bottom foreclosure pricing. Our rental, which we used to live in, is right around 1,500 sf, and I think if I could have torn out walls and totally reconfigured the space, it would have been more than adequate (we moved to cut our commutes down from 20 miles to <4 miles). There was a lack of closet space, cramped kitchen, bathrooms and laundry area, but two dining and living areas.
My first house when I was single, was 860 square feet, which again, could have been fine with a little reconfiguring. The master was an ample size, and the second bedroom made a great office, but would not have been such a great bathroom, since one had to go through it to get to the bathroom. Plus it had no laundry room or dishwasher, since it was a post WWII bungalow. It was cozy, easy to clean and cheap to heat & cool. If it had had a garage or any other type of outbuilding, the 860sf would have been just fine for a couple.