The problem with recessed lighting is that it produces primarily downwards directed light. This is great for large offices where many workers need to use monitors - as the direct downlighting minimizes glare and reflections (which come from shallow-angled light rays).
There are many problems with downlighting in a home environment:
1. It doesn't illuminate the walls - giving a dark and unwelcoming appearance.
2. Most of the light is directed at the floor, as most space in homes is living space - not work space. As floors tend to be dark in color, this means most of the light is wasted. As a result, recessed halogen downlighters are the least energy efficient of all lighting technologies (when measured in terms of "useful" light output)
3. People like to lie down, or recline in their homes. This posture exposes them to intense direct glare from the lights - which are often high-intensity halogen spots/narrow floods - which is uncomfortable. This is what makes recessed lamps particularly unsuitable for bedrooms.
For most living areas, pendant lamps provide the best balance of diffuse ceiling reflected, wall and direct lighting (provided an appropriate shade is used to reduce direct glare). For rooms where directed lighting is required (like living rooms, where accent lighting for points of interest - e.g. pictures/decorative furniture) ceiling mounted spotlights are probably the best choice.
For work rooms, such as studies, utility rooms - halogen downlighting over work surfaces is an acceptable option. In particular, for rooms where computers are to be used for long periods, dimmable halogen downlighters over the desks are an excellent choice.
If energy efficiency is desired (e.g. in home offices for someone who works from home) consideration should be given to the use of proper commercial office fluorescent strip-lighting. These are available in downlight form (sometimes called Cat 2 - which are normally recommended for computer use), but for small home offices a diffused fluorescent strip, or a balanced ceiling-reflected suspended uplighter are probably more appropriate.