Science fiction authors have dealt with this topic for a century now, exploring it in ever greater depth as our knowledge of the universe has grown. Science fiction fans are not only aware of the challenges, but also of the many practical solutions that have already been presented within volumes of visionary literature.
“Living in space” should apply most directly to a habitat that is not planet-bound. This could be either a space station in some fixed orbit, a maneuverable space craft, or perhaps a stationary base out in the middle of nowhere. For people to live under such conditions requires that a number of needs be met.
The space habitat must be able to contain an atmosphere, so it must be air-tight, with air locks that allow entry/departure with a minimal loss of air. (Any air that is lost must be replaced, and the supply of additional air must ultimately be from elsewhere.) The key component for human survival is oxygen, so it isn’t necessary that the atmosphere match that of Earth’s. A pure oxygen environment would support catastrophic fires, however, so it would have to be cut with some convenient, inert gas such as argon, nitrogen or helium. A method of replenishing the oxygen is also necessary. On Earth, plants perform this task, and if there is enough space on the habitat, plants (and algae) can do the job there as well. If plants are not to be used, then the exhaled carbon dioxide must be sequestered with chemical absorption methods, and the oxygen re-released. From an energy stand-point, this is a much less efficient technique.
Life in space requires electricity just as surely as it does oxygen. In space, solar power is an option, so long as the station or ship is near enough to the Sun (or other star) to collect sufficient radiant energy. Solar power is much more efficient in space than on Earth, as there are no clouds or atmosphere to diffuse the light. Solar panels can also be made light-weight and broad, to maximize light collection while minimizing mass. Solar power is more practical on a space station than on a ship, however, as large panels would make safe maneuveing more difficult. Chemical fuel sources like fossil fuels are not really a viable option, as they would have to be transported to our habitat. This would be costly and inefficient, given how little energy combustion supplies. Nuclear power makes more sense. Fission is our currently available technology, and uranium would have to be imported, but it is much lighter and much less is required than with the fossil fuels. Should fusion power be developed, it would provide an even more efficient (and cleaner) fuel supply.
The human body is designed to function in conjunction with gravity. An extended stay in zero gravity is harmful to us, so a means to mimic gravity is required. While “artificial gravity” is a fun idea to toss around, science has no real leads in that area. What we do have is much easier – spinning. If the space station or vessel is designed so that the habitation portion rotates, inertia causes the people (and all other objects) to be pressed “downwards”, against the outermost surface. The most obvious design elements to take advantage of this are either cylindrical or ring-shaped constructs. The apparent gravity can even be adjusted by spinning faster or slower, so passengers/inhabitants might have half-intensity gravity or double gravity if they so desired. (If lower gravity planets like Mars are ever settled, this could be useful.)
Our people would need to eat. Food either has to be imported or grown. Importation would be another costly expense, and would probably need to be limited to dehydrated supplies to cut down on mass. (More mass means higher costs in fuel.) If the habitat is sizeable enough, gardens could be practical and possibly animals could even be raised. Rabbits would be a good choice, as they grow quickly and don’t require too much space. Building materials are expensive though, so habitats are more likely to be small, at least early on. For them, one option would be to use genetically modified foods that would provide high nutrition in minimal space. Isaac Asimov in particular was fond of this method, and suggested that yeasts could be modified to provide a high-protein and vitamin-rich diet. (With effort, they might be made to taste good too.)
Water would be extremely costly to import (it’s heavy!), so it is necessary that water can be reclaimed and recycled. Water would be even more precious than air. Our bodies lose water through excretion of course, but also through exhalation and speaking. Restrooms would have to be designed with water reclamation in mind, collecting urine and dehydrating feces, and then purifying the water, probably through distillation, which is energy intensive, so hopefully the energy supply would be working at full capacity. Water lost to the air would have to be collected either by condensation or chemical absorption. Of all the maintenance costs, water recycling would probably be the greatest.
On Earth, our atmosphere protects us from all sorts of radiation from space. A space habitat would lack that, and require extensive shielding. A thick lead outer wall would be an option to absorb incoming radiation, and maintaining an electric charge on the outer hull would help to deflect high-energy charged particles. Even so, residents would probably do well to wear protective clothing. If gravity were kept a bit low, it wouldn’t be too difficult to wear leaded garments.
People are social animals, they need to be able to interact with one another, but they also need time to themselves. On the habitat, this boils down to a space issue. There needs to be enough space to accomodate a sufficient number of people for socializing, and still enough for the people to find a quiet spot for themselves when needed. Some of the need for socialization can be alleviated via outside communications, if available. Chatting with people back on Earth would be an option, but as anyone who has tried knows, a long-distance relationship is difficult to maintain, and not as fulfilling as having someone at hand.
It will be necessary to get people and supplies to and from the habitat, so a smaller vehicle and supply chain will probably be necessary. Supplies could even be fired into orbit from the planet below and picked up, saving the expense of descent and landing, but a reliable system of resupply is a must. If the habitat is located elsewhere, it may be useful to mine asteroids or exploit other local resources. Again, an appropriate vessel would be required.
A group of people living together need some governing rules to abide by. These may be the laws of the antion from which they originated, but if they are of multi-national origin, or have lived on a station for generations, it is important that they have a consistent set of relevant rules. (No government on Earth currently has laws prohibiting drilling holes in the outer wall of space stations for the purpose of increased air circulation, for instance.)
While these guidelines are specific to a space habitat, most are also applicable to settling another planet (or moon). The main difference is that there would be gravity already, and the habitat would be a ground base, not able to rotate. Weather and geological behavior would also be of concern then…quakes and sandstorms could be devastating if not protected against. Since the Moon and Mars are the most likely candidates for bases in the future, an excellent author to refer to is Ben Bova, who planned out bases for each.