hi there and welcome to the forum.
you've already done the single most important thing in fishkeeping..... research before buying fish.... so you are well on the way to having a sucessful happy experience fishkeeping.
Best thing you can do to start off with is read read read, the links in my sig 'step by step guide to setting up an aquarium' 'whats cycling' and 'fishless cycling' should be your starting point and will answer some of your questions, have a read through them and post back with any more questions you have and we can get you on the right path.
You say space is a problem, I can certainly appreciate that..... i live in a 1 bedroom back to back terrace, I probably have the least space possible, found room for a 4foot tank though.
Have you got a place in mind to put the tank, how big is the space that you have? Sometimes things like corner tanks can help you get a bit more tank into a small space, likewise sometimes you can get extra tall tanks and things like that. Now with funny shaped tanks there are some stocking considerations like if you have a tank that's got a floor plan of 2 square foot but it's 4 foot tall, you couldn't have the same amount of fish in there as you could have if you turned the tank on it's side so it was 4 foot long and 2 foot wide and high. So if you let us know what space you have we can help pick out the best sized tank for you.
OK, there's basically two factors in types of set up's, temperature and salt, you can have any combination of the two
So you can have coldwater with no salt - this is a common coldwater set up suitable for fish like goldfish
or warm water with no salt - this is what's commonly referred to as tropical and what i would recommend you choose
coldwater with salt - this is not a common set up at all, it would be what you'd do if you wanted to set up something like a little rockpool tank for the sealife we get on the coast of the UK
warm water with salt - this is commonly referred to as marine, if you wanted to go with a saltwater set up that's what i'd advise you choose.
However is space and money are a consideration I would not recommend saltwater, it can be pretty complicated and expensive and you need a lot more equipment. There's also a lot more to learn. While there's no reason not to go straight in with saltwater if that's what you really want, it's gonna require a whole lot more research before you set it up. It also needs a lot of time and patience. Most people start off with a tropical set up, and then after they've got a few years of experience they may choose to start keeping marines as well.
once you've decided what size tank you want that will then influence what fish you can keep, the most important thing to remember is that fish in the shop are usually juveniles which means they are often small but will get very very large. Particularly with some of the commonly sold catfish they are sold at 2/3" long and they will get to 2/3 foot long..... so you need to be careful and make sure you research fish before you buy them, or you can end up with a monster which will quickly outgrow your tank, these monster fish are often difficult to re-home cos there's a lot more of them sold than there are people who have big enough tanks for them. So the really important thing is to research first.
Good thing being when you've set up the tank and you are cycling it (the links in my sig explain all this) you'll have some time to do your research and work out which fish work best together. And we'll help you out all we can, just get the names of some of the fish you like and post them up and we'll let you know what is suitable.