How to decorate a small bathroom tastefully?

I think a nice wallpaper that you really like would work well- or at least a border. Once you have that you can move on to general accessories that go well. (Personally I love dark blue and pale yellow for bathroom colors.) And you can put a tasteful mirror above the sink (maybe chrome if that goes well with the room). And then around the sink you can get matching chrome accessories like soap dispenser or toothbrush holder. You don't want to crowd the room too much. You could also think about extending the storage place to make it more of a medicine cabinet sort of thing if you're looking for more storage.