Well, I understand what you mean about the sofa, but it does look comfortable and would seat a lot of people! With the huge wall-to-wall unit across from it, it reminds me of a theatre room. In that case, the way I'd deal with the windows is hang a floor to ceiling drape (mount the track on the ceiling) and cover the entire wall space with it. I'd make the drapes with a centre opening, so that they can be pulled back when not watching TV. On the wall I'd do a series of prints - maybe black and whites, framed in black, of family or vacations, or your particular passion, such as vintage cars...whatever. Have them stretch from wall to wall, centered in the space between the sofa and window. In the large area that you've taped out, I'd place another larger black framed pic, also in black and white, that'll tie everything together. For example, the big one can be a family picture and beneath, a series of smaller 8x10's of individual family members. You'll have a "gallery look" on that wall, with scale and visual interest to balance the other wall.
Another idea - more expensive, so depends on your budget, is to do the whole wall as an accent, in stone (like ledgerock).
One more thing, I would definitely change the wall sconces. My choice would be something that would direct light up as well as down. My other suggestion would be to put a third matching sconce in between the windows, right where your taped box is. This would work with either of the scenarios I've described above (in place of the large picture) Good Luck :)

Hi sunsetviewer, very nice fireplace wall unit !

I wouldn't suggest putting a picture of the same size of the windows in this situation, just looks odd with 3 squares on that big wall.

You might want to add an accent color to the sofa, such as orange to give some pop. A graphic modern wall paper in the back wall works really well. Just a simple window treatment for the square windows should do.

And similar to the last comment, the wall scones should be updated as well.

I would ignore the windows completely and run floor-to-ceiling velvet draperies from wall to wall on a simple hospital track system - then hang a large round mirror in the center over the draperies.

Thank you so much. I like all of the ideas and will have to play with them to see what works. Karina, I had actually thought of doing an accent wall in stone, so I'm glad you suggested it. And David, I can clearly see that it needs to be a darker color from your pictures, and I so appreciate your photoshopping, as I can tell from it that the wallpaper looks interesting all on its own. And bepsf, the floor to ceiling curtains sounds interesting as well. This is a wonderful site, and you all answered so quickly. I will post pictures when it is changed.

I second David's idea!

I would have a mural wall paper, ina design to give depth to the wall and the room, a wood, some clouds (to dream), a beach, the horizon on a sunset, etc, etc... or perhaps the latest on wallcovering mural - a library!!! I saw last week http://www.wallpaperdirect.co.uk/products/mr-perswall/library-mural/86810 and reasonably priced! - Good luck!!!!!

I like David's idea, what a difference. I think my fave would Karina's and bepsf's ideas of floor to ceiling thick drapes with the mirror in the center with David's rug, throws, wall color and sconces. You guys are fantastic!

David's idea is great! Love having the accent wall. I have an idea to throw out there. The built-in on the opposite wall is beautiful and very rich and very substantial. I would add some wood trim around the windows that match the finish and color and richness of the entertainment wall. I think it would help give some weight to that side of the room and help with the balance you were speaking of. It will also help to make those two windows seem bigger. They just seem like small after-thoughts right now.
If you are still looking to put something on that wall, I will throw out one other thought. (I'm not a decorator, so can't vouch for my own ideas, but am happy to brainstorm! Ü) What about a substantial ledge type shelf, centered on the wall halfway between the top of the sofa and the bottom of the windows? (Again, something that would be along the lines of maybe echo-ing the look of the mantle.) I would have it long enough on that wall to go about 1/3 of the way under each window, if that makes sense). You could put some objects on the shelf and then hang some pictures above, between the windows. I wouldn't do just one big picture, but a few pictures hung in a pleasing arrangement above the shelf. Hope that helps. I would love to see pictures of what you finally end up doing!

I would beef up the moldings around the windows..and add a built in bookcase for books, etc..I would pretty much cover the whole back wall but leave a space in between the windows framed out in molding where you can hang a picture..You could add decorative items along with the books but keep it simple and not too crowded..Head over to Goodwill and buy hardcover books. Take off their paper covers and pick ones that blend with your colors in the room..I would keep the colors pretty neutral..Good luck!