I just started my sophomore year of college and while my room was pretty cool last year, I was determined to make it even better this year!

Step 1: Lighting

A lot of dorm rooms have one overhead light which is really not sufficient to light the room well, especially at night. Having a well lit room is important to improve your work environment and not strain your eyes. This problem can be solved with a $10 floor lamp from Target that has a big lamp and a smaller light on a flexible arm that can be used to direct light into the corners of the room.
Desk lamps are also important if you have a desk you work at. I have an LED one which is nice because it doesn't heat up as much as regular bulbs.
Different light levels are nice option as well. Paper lanterns and Christmas lights are awesome for this. I have a paper star that emits a warm, soft light and it's great for relaxing in the evenings.
Special effects lights are also awesome for a dorm, especially at night. With cool lighting, your room will become the hangout spot of choice! Look for cool lights in places you wouldn't normally think of looking. I got a light that projects colorful moons, stars and planets all over the room in the Ikea kid's section! I also have a star projector I got off ebay and a laser star field projector

Step 2: Walls

The last thing you want in your dorm room are bare walls. One way yo liven up your room is with posters. You can get pretty much any image you want in poster form and it's a great way to express yourself. Posters in different sizes, shapes and colors are an easy, cheap way to add to your room.
A lot of people stop at posters but there are so many more options if you just get a little bit creative. A variation of textures and shapes creates a lot of visual interest. In my room, my room mate and I created a a pretty and artistic wall hanging out of four oval place mats made out of wicker that we got for free. Maps of places you enjoy, race numbers, fabric and drawings are just a few other interesting items you can add to your walls (or ceiling!) to make your dorm room feel more like home.

Step 3: Storage and Organization

Although my school has some of the nicest dorm rooms in the country, it can still be a challenge to figure out how to keep yours and your room mate's stuff separate and out of the way. The most obvious solution is chests of drawers. Your school might provide some drawers and shelving, but after you are moved in and unpacked, you may realize you need more shelf space. My friends have a cool handmade bamboo shelf in their room that holds all their tea and mugs, etc. Another good storage technique is stacking bins. They come in tons of different sizes so they can fit almost anywhere you need them to. If you want a more interesting and unique storage solution, you can find cool containers of all sorts in unlikely places. My room mate and I found this awesome trunk at the dump (!) that is perfect for storing our plates and cups.
Having some sort of desk organizer is very helpful too. I have one that has a bunch of different compartments for different things, but even just a mug is so useful for keeping pens and pencils from getting lost.
A mini fridge is, of course, ideal for food (put magnets on it!) but if you don't have one, a bin or basket is a great place for keeping snacks in one place. Nothing is worse than leaving food somewhere and forgetting about it until you smell it!
As far as life organization goes, having several clocks in your room that are all visible from different angles is so helpful in keeping on top of things and getting places on time. Just make sure they are all the right time!
For toiletries, a shower caddy is essential. Get one that is a wire or plastic mesh so it doesn't get a lot of water collected in the bottom of it. If you find one that can fit on the shower head, that can be awesome, but that can be difficult to carry so if you have to walk to your shower, it might be easier to get one that is more like a basket. A toothbrush holder is also a nice thing to have to keep your toothbrush clean and make sure it dries out properly.
For hats, jackets, scarves, bags and purses, hooks that hang over the backs of doors are awesome. These items are kind of difficult to find good storage for, so hooks are awesome.

Step 4: Miscellaneous

Other things to consider:
Plants-most schools don't allow pets besides fish, but plants can be an awesome way to really bring life into a room. Don't have a green thumb? Plants like cactus or bamboo are low maintenance and still pretty!
Mementos and pictures from home-For some people, this might make you homesick, so be thoughtful about what pictures you put up. Cards, letters and postcards from friends and family can be great decorations and remind you of people who love you, as well as small things from your room at home, like a dream catcher or favorite picture.
Music-If you play a musical instrument, having it readily available can be great, if you have space. You can pick it up at a moments notice and might even meet more people who you can jam with! Speakers of some sort are also a good idea. Sometimes, nothing helps more with getting through that brain block than blasting your favorite song. It's also great for hangouts and parties to have some music playing to minimize awkward silences.
Microwave-If microwaves are allowed in your dorm, I would highly recommend getting one. You can heat up water for tea, make pop-corn for movies, heat up instant noodles for late-night studying, the possibilities are endless.

Step 5: Live in Your Room!

Throughout the year, your room will probably evolve, change and grow. These tips are just meant to give you some helpful jumping off points to get you started. Enjoy your awesome dorm room!