Every wood stove or fireplace insert has restrictions about how close to a flammable surface it may be installed - 18" is pretty typical. Then there are building codes, fire codes and chimney requirements. If you can meet these requirements, there's no reason why a corner couldn't be utilized.

I wouldn't take the set up in the picture too literally, however. It seems to show a wooden mantle too close to the stove, a too shallow hearth and worst of all, the wood stacked against the side of the stove itself.

That looks like a house fire waiting to happen!

lol, well i'm building something just like it starting tomorrow!
lavendarlass it will be in the master bdrm and this is my inspiration picture since you first posted it!

mine will be in a corner with a free standing gas stove standing inside the cavity. add a raised hearth and i think it will be awesome.
as to how we're building it into the corner,
i'm having it framed out with three sides, instead of just one large wall cutting off the corner.
the return walls will be 18" from each wall and the face of it goes across to those short walls.
does that make any sense?
i think the return walls and raised hearth gives it a massive enough presence for the room, which is 13x23. hth!

Fallingwaters- Hi! I haven't checked back here in a while, but I'm glad you could use this for your inspiration picture :)

Summerfield has been helping me with my remodel plan...and now I'm still using this idea, but it's no longer in the corner. And, it's going in the living room, not the bedroom. Other than that (LOL) it's pretty much the same idea!

I hope you post pictures of your project because I'm looking forward to seeing it all come together!