Determining Needs
Assuming you've already uncovered all your desires, understand the implication of green building on aesthetics (read here), the next step is to determine your needs based on how you actually live. The less suitable you're current living situation is, the more difficult the exercise, but it is still highly valuable.
Just the right size1: A house is just the right size when every attempt to make it smaller results in a serious impact on its usability. The idea here is to build only the rooms you actually use, and then make each of them the size they need to be. There is no perfect size house for everyone, and different lifestyles need different amounts and kinds of spaces, although there are clearly common themes that work for most people. The "three bedroom, two and a half bathroom" one size fits all model no longer matches what a family looks like. In this respect, you can’t know what the right size is unless you know yourself.
The process is simple: each person records how much time is spent in each room, and preferably even what part of the room and for what activity. After a week or so, a pattern begins to form, and typically some spaces are used often, and others rarely; spaces are both used for their original purpose, and often for other purposes as well. This pattern of usage points out space that is missing or doesn’t work well, and also helps identify ways in which spaces can have multiple uses. Pay attention to what conflicts arise, and what time is spent outside of the house due to those conflicts or other limitations. Are there barriers to being together? Are there enough spaces for quiet activities? Does one activity interfere with another due to room layout problems?
Knowing the activities that occur in a room helps determine the appropriate size for the room, since activities also have a just right size. The only significant limitation of this exercise is that you have no idea how you would use rooms, if you actually had the right ones.
In this analysis, what is usually discovered is that much space in the house is unused, and other places are in high conflict.
What often happens is that spaces are often designed around special events (parties, family gathering, holidays) that rarely occur, or for lifestyle choices that are different from yours. Dining areas are design to accommodate a dozen when they typically are used by only two or three (or sometimes none!), guest bedrooms are rarely used, bonus rooms collect junk and so on. A much better idea is to make spaces share multiple functions, or to allow for spaces to change, for example, but expanding a dining area into the living room on holidays.
Real buildings: theoretical needs don't translate directly into actual buildings, as all the rooms must fit inside one envelope. It is useful to specify needs as a bare minimum, since rooms all tend to grow at they are placed in the envelope. The layout patterns have more on this.
Notes
1: the idea originated in the "Not so Big House" books. See "resources" on the main design page.