get some great family photos up in a collage! try centering the book case.

Do the kids like kites? How about an interesting, large kite hanging centered in the easel area and at an angle with an interesting tail swooshing up and over the bookshelf ending n the corner?

Sounds like you have some active kids, lol! How about a mural on the wall and adding a climbing wall. Kids murals can be easy yo paint yourself if you have access to an overhead projector.
Wall should only be as tall as you think is safe depending on age of course, and then mats below.
http://houzz.com/photos/3775813

Without having to buy anything new you could try centering the bookshelf and then move the little chalk board to the left side corner. Maybe add a fun plant or put a few toys on "display" along the top of the shelf.

Here's another example of a waterfall done in a corner. Notice the simplicity of the mural on the wall, that's what I was referring to in my first comment.

I love the mural idea!

decals
cool shelves

I would first center the bookcases on the wall. On each side I would mount two or three picture ledges. On one side, fill them with children's books, coloring books, activity books, etc. On the other side I would highlight your children's framed artwork. Not sure how old the children are but if they are too small for artwork, purchase the frames and fill with photos (first haircut, baptisms, etc.) When the time comes that they are old enough to create art, switch them out regularly. Have fun!

2 ideas...
1) wall decals. I use them in my boys rooms because you can remove them once they change their minds and they're inexpensive
2) hang art that your kids have done.

paint it as an accent wall....red colour

Wall decals are an easy and inexpensive upgrade. Fabric poufs like the one below also work great. Adding a workspace can also help fill in the gap.
http://www.apartmenttherapy.com/kylers-diy-playroom-a-family-affair-my-playroom-182538
Good luck!

I love the idea of a decal but can't seem to figure out what direction to take it in. As far as the accent paint, the green behind the bookshelves is actually paint that I did. Do you think I should take the green up the whole wall? Or maybe just green accents on the wall? How do you figure out what kind of decal to use? My son is an overactive 3.5 year old :)

Grren on the bottom and blue above, add decals and easy mural![houzz=]
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[houzz=[houzz=]ancisco]

Just to mention from another discussion that her child likes to remove the decals - it must be fun! You mentioned wall space but...another form of movement / exercise? a twister rug is something I saw recently, not that it would be played correctly, but course that wouldn't matter and it might look good.

I also have an overactive 3.5 year old. He's super into Superheros, cars and trucks and construction. You could also create a "letter" area. It would take some creativity from you, but you could print out letters on colored paper and put them up around the room and then surround them with pictures of words that start with that particular letter.

I would agree with those who suggested to center the shelves on the wall. Then I would add a small table and chairs on the right with the chalkboard. Move the work bench over to the left side of the shelves. Go to the home improvement store and get some artificial grass and cut out a putting green. There are also some great interactive rugs that have roads to "drive" cars around on. Above the storage cubes I would put giant lettters that spell out your son's name or other words like 'play', 'dream', 'imagine', etc. You get the idea. I also think the idea of framing your child's artwork is a great idea. I would get four to six frames and flank the shelves with 2-3 of the frames on each side. Ikea has some very fun, inexpensive items for kids (like giant leaves that can be hung from the ceiling) and the Pottery Barn Kids website also has great pictures of playrooms that might fuel your imagination as well.

What a fun room to transform! I would like to see a pop of color on the walls or possibly even on the ceiling. The Echo, 2x2 Glue Up panel in Brushed Aluminum would look great here!

Table and chairs, definitely! In a flash your child will age-out of many types of decorations, so keep that in mind. It's like the princess room for a girl. About the time you get it right, she's a preteen and embarrassed by the "little kid" room.

That's why I can't decide on decorations! He's all into science stuff and space but the baby is just starting to grow into the room. The room is also our family/tv room on the other side of the room so I don't want the decor to take over.

Is there a way to incorporate some of his tastes into the room without it taking over? For example, put stars on the ceiling - the kind that illuminate at night. Then you can have a 'camp out' without ever going outside. Put the stars in a constellation formation (e.g. Orion's Belt; Big Dipper; etc.). And at night when you're watching tv you can turn off the lights in the room and have the stars shining in the sky!

Why theme decorate the room at all? His toys, which will change, can do that! They can even be displayed a bit on the shelves, if you like. I would use paint or decor colors to make it a fun place. Use sone cute throw pillows or bean bags. They'll wear out and are easily replaced.