In terms of rules, I see living rooms with family photos in them all the time. It's a pretty standard thing -- the big studio shots of either just the kids or the whole family (or the whole family in the middle with individual shots of kids to the side, especially if an even number of kids). Often a whole passel o' family pics en masse, in the living, dining or family rooms (or all three).
I still don't have stuff on my walls (don't ask, but not my preference, grrr) but have it all planned out and one includes a professional photo of me and sozlet taken for a magazine (not torn from the magazine, a print the photographer gave us). I chose it because it's a very nicely done photo and also the background includes a lot of the objects in the room (the photo was taken at our old house) without actually being the room. It just seemed interesting to me.
Then I had one other photo of sozlet that I really like (that I took) planned for downstairs.
All the others are planned to be in a hallway upstairs (private) and in other more-private places.