Loren, I would suggest using a linear fixtures, not a directional accent fixture. There are lots of low profile fluorescent and halogen, or xenon, fixtures for just this purpose.

Here is a link that might be useful: Peerless Cove Light

Would rope lighting work?

You may want to look into under counter disc lighting which is made by many manufacturers, including Sea Gull, Nora Lighting, WAC Lighting, etc. The are shallow and although they won't provide the amount of light you have in your other room, you wouldn't have to do anything with the soffit. These could be used more of effect than anything else.

Check out some of the WAC Lighting low voltage housing. The HR-800 is only 4" high, but you'll have to use a remote transformer. Depending on the number of lights, it may be more cost effective to use a remote transformer anyway.

Here is a link that might be useful: WAC Lighting Recessed Lighting

Hi, thanks for all your responses, I just realized they were going to a different email. Re: under counter disc lighting - the sites say they are not rated for ceilings, etc. Are there safety issues with using them that way?

Any recessed lighting I see uses housings that are 6" wide. We have architectural solid soffits that are 6" wide now. If I were to place a recessed housing right next to it, this would extend the existing & recessed housing space out to 12". The problem here is that the light itself, centered in the added on housing, would be spaced at 9" from the window in a 12" soffit. So, to get the right look, I would have to build out the soffit to 18" to make the light centered. The structural soffit is 9" deep from the ceiling height and I think to look right, I would match that. So now the soffits would be 9" deep x 18" wide in from the window surface - hence large. The only recessed solution I can imagine would involve a thinner housing than 6".