What gorgeous woodwork and detail. I will bet that there was an original panel, which was replaced to bring in light. You can paint vinyl. Google it. My painter just did y over sink window, which was just too good to replace, very successfully and it looks wonderful and new. Question is what color to paint it? Is there anything within eye shot, like fabric or rug, that could influence your choice?

Good Day: I don't think that you really need window treatment in this window if there is no issue with privacy but if you do, chose a minimalistic one from sheer or translucent fabric. Please visit www.PleatedBlindsStore.com for many photos and ideas about window treatment solutions....

Rather than doing drapes or curtains, I think just painting it would be fine, but you could also consider doing a Edwardian period shutter, or suspending a period stained glass panel in front of the window.

You could do long sheers, I can't tell how high the ceiling is in that area, but in a regular room, I would put the curtain rod closest to the ceiling and let the sheers hang. Even drapes with sheers, drapes going wall to wall just stopping at the window allowing the sheers across might just trick the eye enough to make it look not quite so awkward a space.

Great job on the painting. It totally matches! The stained glass window films do look cheesy. The frosted films look much better. I like the leaded and beveled designs for keeping the light, but obstructing the view (here the remaining view is of the white grids - can you get those removed?) One other thing I've seen, but cannot find an example of, is where you take a nice piece of antique lace work, sandwich it between two sheets of glass or plexiglass, frame that, and hang it over a window with chains or inset it into a the upper or lower panel.