I would get rid of the valances first off. Is this your main living room or an "extra" room?

The valances and crappy blinds are definitely going to go. This would be used as a family room. We have the west elm Andes sectional if that helps for visual purposes.
We have a more formal living room that is off the entryway which will be more of a sitting room - think sofa and accent chair.

Looks like the TV can go on the desk next to the fireplace. A sectional sofa with one leg facing the fireplace and TV.

Is there still room for a pool table?

Do you like the knotty pine? You can keep it and have a cozy room, but the old speaker screen to the left of the fireplace will leave a hole....might want to consider removing the paneling from the back wall and reusing some of it to replace the panel(s) with the cut out.

If prefer to paint, still need to repair that wall. Knotty pine is very difficult to paint. It is porous and the knots bleed through. Depending what is under them, frequently no wallboard, one option is to drywall over everything then paint.

If room is below grade, or on a slab, a slate or tile floor and an area rug would be nice.

Truthfully, I really don't care for the paneling. There is so much around this home that I need some relief. The kitchen/dining room, sunroom and a bedroom all have this knotty pine and ceiling beams. While I feel that ceiling beams are great, they really make the room feel smaller. We have plans to keep them in a few of the rooms, but will be painting the ceiling and beams white to make the room appear bigger.
The kitchen is going to be a bit harder as well. See photo:

How about a treatment like this? Talk to a tile contractor about covering the brick with tile or stone. Oh yes, I vote against the blinds and valances too. On the plus side, I love the natural light you get in there. If you paint, use a good oil-based primer like Kilz.

lose the window treatments, lose the knotty pine on the walls, do something to the fireplace to make the brick less boring, leave the ceiling alone.

Hello Rachel S,

We would paint everything white in order to get a cleaner and more modern look and add a nice sectional sofa with a square coffee table and some colorful accessories.

You can have a look at our ideabooks and projects for more information.

Hope this helps,

Atelier Armbruster LLC,

http://atelierarmbruster.com

It looks like you have Pickwick Paneling like this. Have you thought about covering one wall with 1/4" drywall and painting that? My sister had the same problem you do and she did that. It looked good and sort of diluted the overwhelming knotty pine look.

lose the propellor like fan & paint everything white

I think I'd drywall everything except the fireplace walls. Do white shelves/built ins on either side of FP (that way, you can hide that speaker and the pine in the back will give it some character.) I agree with the others - TV to the right of FP and keep ceiling as it is. As for FP, I'd paint it - maybe a charcoal gray - and add a barn wood mantle (that matches the ceiling). 86 the sconces (they look really low) and replace them higher - or do without. And paint for the drywall -- I'd keep it warm - a dark (er) cream-y color. Lovely space!

Great examplr JudyG.