I saw this picture on This Old House's The Hardware Aisle blog and was reminded of when my best friend and I did something similar in the bathroom of our tiny two room apartment in University City.
It was perfect for storing all manner of bathroom and cleaning supplies. But, of course, my anal nature required that in order for the shelf display to be aesthetically pleasing, I had to purchase enough rolls of toilet paper to fill the entire perimeter. I basically made crown molding out of toilet paper. I wish I had that picture to post.