What else is in the room? More pictures? I lean towards bamboo shades but it may depend on how you use the room. Are you in the room at night and want privacy? Does the bay window face front ?

Hey There: With your beautiful trim around the window, you need inside mount installation. It seems like you have only limited depth available for an inside mount, so bottom up and top down operating pleated and honeycomb shades are your best option. You will have full privacy and can move the shade to any position for the perfect light during the day and nite. Check out our design ideas here on houzz or online at www.PleatedBlindsStore.com

Thank you for all the suggestions! I should clarify that these window treatments would be primarily aesthetic - I want the room to look more "finished". We live down a steep hill, so privacy is not an issue. We use the room for reading or it's another space to use for conversation when we have guests. It's fairly small - we currently have three while leaning bookshelves in the room and will likely get rid of at least 1, possibly 2. Also replacing the ottoman with a glass coffee table. Would you stick with white for the window treatments, or should we use it as an opportunity to get some color in the room? Currently have a dark couch in the room, it doesn't really fit, but it's relatively new and it's what we have. I am hoping I can soften it by adding nice throws and pillows (not the ones we currently have) so I am open to suggestions on color schemes. Thanks a million!

I’m not an expert but possibly a top treatment of some kind that is unstructured and picks up the colors in the floral chair. This will soften everything else that is in the room. Coffee table - oval or round in size to offset rectangular shape of furniture and molding.

We would recommend our Top Down/Bottom up shades in a lovely light-filtering fabric!

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Since it's more about aesthetics than function, I definitely would use drapery panels with a subtle pattern or a great texture. The panels would help add weight in the bay area and help balance the dark sofa across from it.