Virginia Woolf's famous essay doesn't just apply to women writing fiction. While I was living in a dormitory in college, I was forced to live in a room with another person almost at all times. Having another living, feeling human being in your creative space, regardless of whether you are an introvert or an extravert, is really hindering. The one semester that I was able to live in a tiny room by myself, however, was my most creative semester; it was also the semester that I began work on my first comic book.
Luckily, most artists in college can find a classroom or a study spot to work. Having your own space is important, regardless of size. I still live in a tiny bedroom in a small apartment, but I am able to make the most of it. My room is only about 10'x12', but aside from my bed, my closet, and my dresser, everything in it is devoted to art and writing (well, and some gaming - I have to have breaks sometimes).
Equipment is obviously important. I was fortunate enough to be given that ugly yellow thing in my art space to handle the computing processes necessary to run my art programs and video editing software efficiently. The software I use, however, is mostly free stuff that I've learned how to utilize effectively. For those interested in creating digital art and haven't started yet, Gimp is, without a doubt, the best free digital art software available for download. They update frequently, and many artists rely on it for their projects instead of paying up the wazoo for Photoshop. I use Windows Movie Maker for videos - also free and very simple to use, although not nearly the professional quality of other programs. The only thing I paid for was my comic-making program, Comic Life 2, which runs about $30, but is simple, creates decent and quick layouts, and is more specialized than indesign (not to mention it's a one-time fee instead of a membership).
When buying new hardware, I don't buy cheap stuff unless it's not important that I buy something nice. For example, I don't need expensive chamois for charcoal, or expensive pens for jotting down ideas, or even expensive paper for just about anything. However, I do need a nice monitor.
That lamp, by the way? Ten bucks, and I use that thing for storage as well as lighting my videos.
My final point on studio space is to make sure it's a place you feel comfortable in. There is definitely something to those uncomfortable desk chairs in school - you're less inclined to fall asleep in them, certainly. But if you're uncomfortable when you're trying to work, it's important that you're able to switch it up and do your work somewhere else. I usually write on that big red chair, but if I'm really struggling, something as simple as sitting on my bed or my desk, or even just turning around and sitting on the footstool is often enough of a change to refresh my thoughts.
Hopefully this helps you with your own studio space, and keep an eye out for that grapefruit in my footstool - it's not for eating....