Do you have a dining area?

Built in bookcases for a small library/reading room feel.Comfy leather chair & ottoman where the chalkboard is now. Love the beams, but they are too shiny...they need to look more rustic. I would put hardwoods in this room & extend it into the kitchen & beyond. Pics of the other side of the room where the kids table is??? Natural blinds on the window, perhaps a loveseat angled by the window.

It's got lovely features, I'd have a 'parent escape' here! Make the fire surround the focus, a comfortable sofa, and feature chairs, coffee table and little else... DEFINATELY no tv. A room to warm by the fire and read a good book, or sit your guests an a winters day!

Would like to see more pictures?

http://houzz.com/photos/373477

I'd put shelves in those recesses and make a wonderful reading nook by the fire. In front of the window I'd put a nice table and chairs for games, having a snack with your daughter or for a casual lunch with friends. Here are some versions of the general idea for your space.

If you have children, maybe you could make this into their playroom. It's always nice for kids to have a place of their own to keep their toys and hang out. If you're going to make it a playroom here's what I would do:

Paint: try a bright, fun color that will catch people's eye. If you have only girls and don't mind a little pink, fuschia and bright orange look great. Yellow and lime green also look nice if paired the right way. I like sea blue and lime green, too.

Floors: I like the carpet, but maybe try hardwood if you're going to make a space for your kid(s) so that the carpet doesn't get stained.

Shelving and Storage: a bookshelf is always nice to have in a kids play area. Another helpful storage item is a 9-hole wooden cubby hole. You can hold just about anything in them, games, dolls, art supplies, anything! You can find them at Target and Lowe's. If the room has a closet, you can store board games and puzzles in there. If you want, you could even get the colorful shelves for the walls that store little things!

Furniture: You can order some really nice bean bag chairs from places like Lillian Vernon that are customized, or you can get them at Target or Walmart. Kids loved bean bag chairs! Rocking chairs are also great for reading, playing handheld devices, using Etch-a-Sketch and many other things. Sometimes, it can be beneficial to have a bench that opens up to reveal a toy box type thing to store toys in and to sit on. I would definitely try getting a love seat to match your color scheme and a coffee table!

Artwork and Decor: you can buy some unique frames to hang the artwork your kids have done in the room, or maybe even a ribbon board to showcase them on! Try a multi colored clock to add flare and fun to your walls.

Hope this helped!