DIY room dividers are perfect way to maximize a small space, and also are great as decorating focus point. They offer privacy, boundaries, and aesthetic elements all without altering structural components of a space.
My room divider - 2 bookshelves, a tension rod, and two curtain panels. Definitely incorporating bookshelves, but maybe only a 4 foot high divider. Is less for privacy than creating a separate sleeping area in a "teen cave"