A recessed bookcase would look good to the right of the fireplace. You may consider covering the TV with a sliding mirror or possibly a large painting. Candice Olson of Devine Design does this all the time and they are always classy.

I might be one of few people who doesn't like built-ins! I love furniture too much to have something permanent. That being said some designs do look nice but in this case I don't think it's a good idea for a built-in. That corner already has alot going on with the railing. The insert is too small to put a true built-in so the shelving would be sticking out. Also, shelving to me just means having more stuff. If you need storage then I suggest a sideboard for the wall where the stairs are. If this is your furniture then get a smaller coffee table to make the room more fluid. If you don't need storage then I say nay to the built-in.

I assume you would be putting your tv in the built in? We're you thinking of a corner one? Because of the stairway the suggestion of a credenza on the stair wall might be the way to go. It could house all your components and hold your tv.

Here is an example of a corner built in unit.

http://houzz.com/photos/323423

I agree with Lydia. A built-in in that area would look crowded and like an after-thought.

Why not have sliding doors made to cover the TV nook. You could use louvered doors or plain panels.

This will be a whole lot less expensive, too.