what style is your home? Classic, traditional or modern? in any case I would suggest to create surround which will cover entire height up to the ceiling. if you are going with more classic style, I would suggest to create flat full height columns on each side, built in mirror between columns starting from mantel and place wall sconces on each column. see this quick sketch. I am sure you can find good images here on houzz

Ii would say traditional style, fireplace in back corner of our family room and dining room combo, with windows across back of both areas. Would like hearth high enough for seating. Any suggestion for materials for surround and hearth.

U should add a mantel and some cool decor!

based on sketch I attached earlier, use stone around fireplace opening and some nice stone mosaic below mantel. actual columns and mantel can be stained or painted wood. if you go with stained wood use darker stain. hearth should be stone as well.

we have a few sites that have ideas for fireplaces using stone. This might help:)!

http://www.flickr.com/photos/buechelstone/sets/72157626765433140/

http://pinterest.com/buechelstone/fireplaces-using-stone/