Eurorail Models for a great range of model rail supplies.
If the space available to you is a little limited, then consider 'N' Gauge! It being roughly 1/2 the size of 'HO' means that you can fit a really fun layout within 1/4 the space that an HO model would use. (divide by '2' for each dimension!)
Another thought with 'N' gauge, is to use 'N' gauge in an area where some would use 'HO', but use the extra space created to give some feeling of distance. Distance (or lack of it) has always been the bane of railway modellers, with the length of track available between stations being nowhere near realistic. Using 'N', however, helps just that little bit towards creating a believable railway scene.