Hi! I am a designer from North Dakota and I would say that if you all want to watch tv together and see it clearly without a neck-ache, furniture in the middle of the room is the best option for you. You could always do a big sectional couch like the ones you have been looking at and do some big, comfy chairs on the side. Behind the sectional, you could even put a table to divide up the room and it will be able to hold lamps and other family items. Hope this helps and you can see your vision more clearly. If not, check out Autodesk Homestyler. It is mainly for designers (a free program), but it is pretty easy to navigate around in. Good luck! :)

When you are buying your sectional or couch, if you want to keep the space more open, make sure you select a couch that has a lower back, so you can visually keep the room "open" looking. Also, a well-placed and well-selected couch will look much better in your larger living space, rather than having everything crammed around the walls. One more option: Talk to the designers in your furniture store - they know their inventory and will be able to help you choose the right furniture for your space.

Personally I would place the TV along the wall beside the staircase, then the sectional can be placed in front of the window which won't intrude into the breakfast nook area as much.

Thanks so much! I didn't know about Autodesk Homestyler, and it is very helpful!
I'd love to put the TV along the wall beside the staircase, but then we won't be able to see it from the kitchen or nook. We like to be able to see the news while we are preparing dinner.