Patch cracks and then stain. Create a space to sit and converse. A space to cook. A space to lounge. If you visualize what you want the patio to do for you and then buy what you need to fulfill that idea, this space will become functional and pretty. The last picture is not for a design plan but to show you how one space can be used for different purposes.

Depends on your budget but there are great new cement topping materials out now. There are companies that do a thin color overlay and stamp it any pattern you wish, in any color you wish. You might want to call a few companies. They should be able to give you a rough price per square foot over the phone. They'll want to sell you a new slab, but since that one is obviously old, and not bearing a lot of weight, they should be able to fill the cracks and stabilize it enough for an overlay.

If you decide not to do the cement overlay, then I would proceed in the following way:

1.) cement cleaner/degreaser. (what are the dark stains from?)

2.) Make up some TSP, flood the area, let it sit for a while and then powerwash, or scrub with a deck scrub brush on a pole and hose off very well.

3.) Fill the cracks.

5.) Stain with 2 or 3 colors of cement stain. If you use a garden sprayer and keep moving and playing with the colors, you can get a very marbleized natural look and you can actually make it look very nice.

6.) Seal with a cement sealer, maybe a semi gloss? or matte finish. It will seal in the color and be very easy to just hose off in the future.

19 states prohibit the use of tsp in some way or another. Extremely toxic when it gets into waterways. Do not use outside. Also irritating to humans.

Home Depot sells a safe TSP alternative.

Patching and staining will make it look even worse.

Lose the granite border, pull up select chunks of concrete along the cracks. (you will be amazed at what you can do with a sledge hammer and pick axe) Let the landscape erode into the concrete. Plant drought resistant, sedum mosaic within the cracks, short grasses, etc. Lushly planted planters will help as well. Check out project in Denver that was successful cutting into industrial concrete desert to create landscape: http://www.plotproject.com/freightscape

You can use the garage as a ledger for a shade structure. Tension shade sails are cheaper than pergolas.

Thanks everyone! Kelly D, I am so impressed with that transformation and I love the suggestion of a sunsail from the garage structure. And edging with a rain garden type of planting would be great as well. This has spurred my imagination!