Thanks for creating this thread. I'm one of those who believes 1 gal. is minimum rather than 2.5 or 5 gallons. There's someone on Yahoo Answers who is always really rude when people ask questions about their bettas and he/she yells at them to get a tank of at least 5 gallons.
I think it depends on the size of the fish. Some fish can live comfortably in 1 gallon. Fishie was in a 1 gallon tank before I got his 5 gallon ready. He was really active and everything. He never flared, though, until I put him in his 5 gallon. Then I could really see that he was a HM! So I think in his case, he did enjoy having more room. Then when I had to treat him for fin biting, I put him in the 1 gallon, and it was obvious that he'd grown since the last time he'd been in there and he looked huge. He didn't move around a lot, either. It was obvious that it just wasn't enough room for him. He's happily back in his 5 gallon, now.
Shiny is in a 2.5 gallon. I think it's a good size for him.
My female, Jasper, is in the 1 gallon now. I think it's a good size for her because she's small and has a lot of room to move around. I had my first female, Lila, in there when I first got her, but I put her in the 5 gallon when I moved Fishie to the one gallon, and actually, she really liked all the room. She fully colored up, when while she was in the 1 gallon she always had stress stripes, even though she seemed happy in there.
So I think it really depends on the size of the fish. If you keep up with water changes, small fish do fine in one gallon. Of course as you can see in my case, my fish who I upgraded to bigger tanks enjoyed it even more, but you never know until you try it.