The best way to deal with this situation is by using pots, a small dull bland concrete yard can easily be transformed into a beautifull courtyard garden, this is what I do and I do this by planting pots of varying sizes, shapes and colours and combine some shrubs with architectural foliage along with perennials then plenty of bedding plants etc put the larger pots at the back and put a jumble of smaller pots at the front, trust me this will give you a fantastic tranquill yard, add a small water feature a nice bit of garden furniture and sit there on a summers evening and sip some wine and feel at peace and inspired by what you have achieved, anyone can achieve this even if your not an expert you will soon get the hang of what to plant etc, all you need to be aware of is pots need to be watered, but a small price to pay for what you will achieve , hope this helps.

I might add to the above excellent answer is that you should go to the Goycopedia at the bottom of this page, tap on "c" , then tap on "container garden ideas" and you will get some beautiful images and recommendations of what Julien is suggesting that you do.

you could get some sleepers and make a raised garden too and you can put decking down too .

How big is the yard? Without knowing your location, I'm guessing that you are talking about a fairly typical UK terraced house yard (12-15 ft squarish) rather than an American or Australian back yard that could be relatively huge!
Pots are the way to go if there is no border. You could put gravel down; it's a bit of a nuisance really as a walking surface but you could lift a couple of slabs and make a little gravel border for plants and extend that to a small corner for a table and a couple of chairs.
If you have walls all round, painting the walls in light, bright shades will create a different feel.
NP has suggested sleepers to create raised beds - these will also give you something to sit on - but they do take away 'floor space' and can make a small area seem smaller. I 'inherited' raised borders in my tiny back yard when I bought this house - I have very mixed views about them (still) but have put in a small tiled pot area, a little pond and a rock garden. This summer I will be taking up the concrete slabs and re-laying blue bricks and a variation on crazy paving (broken slabs with slightly bigger gaps to give space for some small plants)
Somewhere in the great wide Internet world (or even the real world of books) there will be pictures of real back yards that can give you some ideas - and I'm trying to recall the name of a GoYer who has only the area under the staircase to her flat that she has painted and filled with colour.... Just found it - take a look at http://www.growsonyou.com/samantharichardson/photos if you like lots of colour. I have some picture on my blogs from last summer as I was 'building' my garden.
Adding another link for you http://uktv.co.uk/home/item/aid/655430 -just as a starting point. if you do an Internet search for 'back yard ideas' you should find more than enough inspiration (probably be overwhelmed!)

Joe Swift is doing a survey of people's back gardens on Monty Don's current gardening series on TV. I have seen 2 so far and it's amazing what can be achieved.

What Monty Drone gardening series is that then? another re-run of Small Spaces Big Dreams?

No I don't think so Urbanite but I don't take a tv mag or a paper to give exact details. I just do channel hopping.However I'm sure it followed Mastermind which I think was Friday. Sorry---vague--senior moment etc!!
Monty was mulching and sowing broad beans, there was a woman who breeds hellebores and Joe Swift visiting back gardens.

That was Gardeners' World.