Personally, I love making the fireplace wall an accent wall in a room! I think it looks great and it pulls focus in a positive way! Grey, black, and white area always a great combination, but you may want to pick an accent color to brighten up the space a bit (like a cobalt blue or medium purple) in some of the accents like art, throw pillows, etc!

Thanks for the comment....any suggestions on what can be done with that big wall by the stairs? Maybe something similar on all four walls or a paint color?

With you liking grey (and I LOVE grey haha) it would almost be cool to do something with a white and dark grey on the fireplace wall (whether it be stripes, wallpaper, etc) and then use a medium/lighter grey on the rest of the walls to tie it all in.

Best example I have is here, how it's a dark grey and white stripe (again, you could do any number of things) and a lighter grey on all the other walls so it's modern but it flows super well. http://www.fromrentingtoremodeling.com/2012/11/that-one-time-i-thought-i-ruined-mirror.html in the last photo you can see there are dark grey stripes and a more medium grey wall. There's another example here http://www.fromrentingtoremodeling.com/2012/08/stripes-grey-love.html

Why not wallpaper both? Especially if you're going to only wallpaper half that wall, it won't be too much. Have you considered gray, navy blue and white? Very beautiful color combination.