Naturally, your available space, energy, time and money will dictate the ultimate shape of an HO layout, but whether you are filling every inch of your basement or just running a figure 8 on a single sheet of plywood, you can be creative. It's all about choosing a theme that will hold your interest and the interest of your visitors. And, if you have the extra space, you can put several themes in a single layout by using partitions to separate "regions" of your layout.
If you are a detail-oriented person, you may want to model a particular railway in a specific region during a specific era (or even a specific year). This requires a fair amount of research, and it is best to think small in terms of scale. Pick a particular hub or off-shoot in a small town, or if you prefer a big city, limit yourself to a few blocks of the city. The advantage of such a limitation is that you can focus and have a template in historical records and track plans. The disadvantage is that some details may not be available to you and some models might have to be close facsimiles rather than exact replicas. (See Reference 1.)
There is no reason you can't completely invent a railroad or a fictional line for a real railroad. Many modelers choose to do this if the creative process is the primary source of their enjoyment, as opposed to replication or duplication. It also allows for flexibility in choices and modifications. With a fictional railroad, you can't go wrong because all the choices are yours. Most fictional railroads are historically inspired, however, so you can still maintain a sense of cohesion and accuracy even if you are creating your own world.
Since the 1840s, circuses have used railroads as a primary means of transportation. These trains employ passenger cars for performers, flatcars for equipment and modified boxcars for animals. In many cases, larger circuses owned their own cars and engines. (See Reference 2.) Such a layout could be colorful, feature a variety of rail stock and even invite a circus or carnival scene, with moving rides and plenty of animals and people.
Rail transportation really took off after the Civil War when Americans sought new lives in the drive westward. One interesting option would be modeling a small town in the southwest where cattle were loaded for shipment back East and passengers were arriving to seek their fortunes in the West. And somewhere in town, you'll need a saloon and a gun fight!
In the United States during WWII, the railway system was incredibly important and vibrant and this makes it a great era to model. There are several HO-scale military vehicles and figures available on the market and many of the buildings, engines and cars produced for modelers were in use in the early 1940s. Both equipment and personnel were transported to their destinations by rail; flatcars loaded with tanks could be sitting only a few rails away from a passenger line that featured heartfelt goodbyes. Rail lines were also important around shipyards and factories at the time.
During the 1950s, the silver screen ran wild with giant bugs, monstrous aliens and towering reptiles. This could make for a very exciting and fun layout, and could justify both steam and diesel engines. There are several giant monster kits available and a few insect science kits commercially available that would tower threateningly over the trains in HO scale. You could even use the screen from a portable DVD player to model a drive-in and show monster movies as the trains circle the tracks.
If you are looking for a panorama, modeling the Appalachian or Rocky Mountains offers an opportunity to create a colorful scene in autumn or spring. Small towns can be modeled in some detail, and short passenger lines can be coupled with lines feeding large industry, like coal or lumber hauling railroads. Rail transportation of goods and raw materials is still important in these regions, and therefore you could model a wide range of eras. Commercial, tourist steam lines can be mixed with modern diesels this way as well.
An Operations Yard
Some modelers like to focus on operations, the day-to-day ballet of getting the right trains on the right tracks on time. An operations yard with a roundhouse and turntable can be a very impressive and dramatic layout that allows for a number of different types of engines and cars in operation and a lot of motion.
Factories, mills, lumber yards, coal mines, and shipyards have a longstanding relationship with rail lines. For much of American history, rail transportation of goods was a primary method of getting materials from one place to another. In the 21st century, it is still important in the "inter-modal" business that transports preloaded cartons from coast to coast.
Snow can be fairly easily modeled with plaster or white gypsum cement and can make for a distinctive scene. Combining special snow removal equipment, winter sports and a downtown holiday scene could make for a fascinating layout for viewers.