Have you thought of replacing blinds with timber shutters!

I think a window treatment like this is very nice: [houzz=]
I like that the rod falls short of going all the way across the window so it doesn't look incomplete.

I would do silk or high quality looking fabric curtains almost to the ceiling on both sides. Loose the topiaries on the fireplace as they will compete with the rich look and do smaller scaled accessories :)

Thanks for the ideas - I agree that I need somethig almost to the ceiling...just wonder if a neutral will work or if I need more color?

This is a lovely traditional/transitional styled room. I recommend curtains on 1" iron rod and rings. The curtains can be made in a a plain or printed fabric to compliment your existing furnishings and rug (A stripe would be great). Mount the rod just below the ceiling and extend them about 4' off each side of the window. The curtains should meet the floor or break 1". Each curtain panel should be at least 1 1/2 -2 widths of fabric wide or they will look skimpy. If you need privacy or sun control and want to leave the curtains open then add grass weave shades under the curtains (inside mount) or white plantation shutters. For a more streamlined look you could just go with the shutters alone. If you choose curtains then let them drop fully to the floor for a more updated look. I would avoid using hold backs or tie backs. It looks like you are going for a more clean line transitional look with your choice of furnishings, area rug and accessories.