Last week, I came across this post by Eddie Ross - he transformed a useless closet into a functioning bar space for entertaining. I had the perfect closet to transform - it was in our dining room that was used as a media closet for the previous owners.
I painted the inside a light grey that has a slight tint of blue... looks better already! Notice the file cabinet still remains (no where else to put it!) and our wireless router and sound system is stashed in the retractable tray that once held their keyboard. 
Here is Mike installing the cubbies for our wine storage shelf. We installed a hardwood counter top (a 4'x2'x2" piece of oak that we stained) and accented it with a piece of stained baseboard trim. The result is a thick looking countertop that looks expensive... but it only cost $10. I made a curtain out of a piece of natural linen and hung it on a curtain rod to disguise my files.
To stock the bar, I added (left to right) linen cocktail napkins that I purchased at an estate sale, a small bowl of cashews (I'll store the entire bowl and nuts in a large tupperware container to keep it fresh), my collection of cocktail shakers, and a large pewter bowl for iced beers, and an ice bucket.
I hung the wine opener on the wall so we'll always be able to find it in wine emergencies... I also have a couple of silver trays ready to go for a delivered round of drinks.
Done! Our dining room bar closet is complete - and ready for a party. I am using the closet not only as a useful entertaining device, but as a way to artfully display my collection of glasses. I love the way the pale grayish blue paint looks with the oak, glasses, silver and pewter pieces.
Thanks for the inspiration, Eddie!
Oak Board for Counter = $9
Wood Trim for Counter = $3
Painting Supplies = $10
Curtain Rod = $5
Linen = $6
Extra Wood for Cubbies = $17
Total = $50
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