Talk to bobby palkovic at merlin. He favors this setup and speaks about it often...call or email him.
Don't know what you mean by "small" but assume 12x 12, 13, 14, 16?
There is really no advantage in this case -- although no real disadvantage either except it will be harder to keep the acoustic variables symmetrical unless the room is an actual square. Harder too to get speakers sufficiently apart but maintain decent distance to sidewalls. And of course you might find yourself sitting in one of the corners where bass could be boomy.
Standing waves generally won't be a problem either way because of the small room size. I think the biggest difference you may discover is that the diagonal arrangement will require almost complete acoustical (absorbent) treatment of all walls, which in an axial setup could be more discretionary.
I struggled to get good sound in my nearly square room (14.5 X 15.5) for six years. The bass in particulr was never strong. I then set it up on a diagonal at the suggestion of Adam Decaria at Zu. It now sounds great with no acoustic treatment. Adam said the diagonal set up breaks up the standing waves.
Mine is pretty much diagonal by default (16x12x10). I have a nice little triangle with me in the middle. Even got a desk in the mix. And the floor is carpeted. Behind me are bookcases and two small (12x24) horizontal windows. In one space I put a 12x12 piece of acoustic foam and in the corner behind me I put a few of the big triangular shaped pieces. No boom, no nothing.
Serendipity for sure - if there is a critique its that I don't think I am getting all the imaging/soundstage I could in a more conventional set up. The other thing is, since my rack is in another corner against the wall I ended up with longish speaker cables.
Nsgarch, I respectfully disagree with your statement. Based on extensive diagonal set-up experience vs traditional in a 11*13 room with 3 different monitors and 2 slim floorstanders, I was able to achieve tighter bass, cleaner midrange, fewer 100-200Hz abnormal responses every time...I currently have speakers 7ft apart and only 1ft from wall. It actually reduced the need for room treatment as far as I am concerned.
Each room differ but I am fairly confident that diagonal set-up is a bonus for small acoustically challenged room - especially when square or near square.