Is that the only window in the room? Is any furniture going on the wall under it? Do you need privacy? light control? or just something decorative? Is this a formal living room?

Yes, it's the only window...I would like privacy, it's not formal and there may be a love seat under it. There is also cold air return vent near the floor. You can see the corner of it, I'm replacing the cover. Thanks!

How about shutters with decorative panels at the sides?

Hard to say without seeing the rest of the room and the style you are going for. It does feel very soft and feminine right now, so if that is the feel you want, I would think about panels hung on a rod just a couple of inches below the ceiling that you can open and close for privacy. I would mount them so that they can open all the way to the outside trim edge of each window, should you want to open the windows.

You could also look into the Luminette-style blinds, which essentially are verticals hidden inside sheer drapery.

But first, can you tell us more about the style and feel of the space? What does the furniture look like, particularly the loveseat that might be below the window?

Wait until you have the furniture in the room, then snap another photo and post it.