I'd recommend a woven wood shade for this window, something (like attached). The lighting might just need an update (but still sticking with your traditional style?) What do you think about this one?

hi. I think ceiling to floor botanical themed drapes hanging from a heavy ornate rod would look fabulous! Put cream toned sheers up with them for privacy and
to soften the room. And hang them from ring clips for an up to date look.To buy them will be expensive due to the length. Buy some fabric you love and sew long reqtangles and there you have them! Buy enough fabric for a table runner too! What ever you do hang....dont do grommets as they are too casual for the space. The arch is a nice feature and any window covering you do does not have to mimick the arch. Just hang'em straight down from the ceiling. I can visualize a very sparkily (sp?) light fixture but not a traditional chandalier. something like what i attached....a modern look. Beautiful room! Anyway, that my ideas :)

Hello jewel girl. Love the idea of a botanical print !!! Also really really want a drum pendant fixture somewhere and I think this space will work well. Thank you so much for responding!!

Rachelaughs.... Thank you for your response as well. Unfortunately the image you attached isn't coming thru. Feel free to try again. Thanks!

I only use plantation shutters, or wide wood blinds sometimes with tapes, or no covering. Some plantation's have a rounded top for windows like yours or you could leave that rounded area without cover. Not sure what your decor is for a ceiling light. Modern? Here are some modern-style ceiling lamps. http://www.houzz.com/dining-room-modern-lights

I agree w/ JewelGirl: This room needs long floor-length draperies on a heavy rod mounted above the top of the arch

Sorry, I did not have the time to "trim" the drapery. Hope this helps

Thank you so much for the visual Marina. Exactly my vision. I have another question for you. There is another larger window on the opposite side of this room in the family room but it doesn't have the arch. Should those drapes hang higher on the wall closer to the ceiling?? What are your thoughts for lighting in this dining room? I was thinking drum shade.....

Hello camurray, you seem to have an eclectic mix of style, but love your wrought iron/rubbed oil bronze metal finishes. The photo of drapery below is definitely more in keeping with your transitional style, I don't think a floral pattern is aesthetically pleasing for your space, in fact, it makes it too country, rather than dressed. Two tone drapery style like in the photo is perfect for your dining area, its casual, yet perfectly suited for the room. Keep your rubbed oil bronze metal colour in your fixture, but add some bling with textural detail and cleaner lines to push it more modern without going to chrome to do so. This will cause much needed tension which is always key in creating an amazing interior. I've also got a photo of Hunter douglas everwood blinds, which can conform to the arch, adding drapery panels for softness. Either / or type of window treatment would work very well for you. Good Luck - lots of advice here to sift through.

Thank you for responding Marie. I love the two toned drapes. I'm really not into floral at all but thought a pattern of some sort might work.....like a soft trellis pattern but the two tone seems less busy? Also love the pendant. Thank you!

Hi camurray, need pictures. The more the merrier!

Woven wood blinds with long panels - but put the rod above the transom and match the same height on the other window.

Hi camurray, You can bring in pattern, just be thoughtful about it. Maybe add a complimentary pattern in some toss cushions or bring that gorgeous red from your painting down into the room. By keeping the drapery more neutral, it gives you lots more room to change out your accents in candles, toss cushions, accessories and art. Good Luck!

yes, I agree with Mona. Draperies over the transom, gives more height even though transom is tiny but still long panels are better.

Here's a picture of woven wood shades...

I drew two shades - woven shades, but you should do one if you decide to do it. They make them all sizes.

Roman roller, definitelly, hang it up the arch...
https://www.google.cz/search?hl=cs&q=Roman%20roller&psj=1&bav=on.2,or.r_gc.r_pw.r_qf.,cf.osb&biw=1366&bih=595&um=1&ie=UTF-8&tbm=isch&source=og&sa=N&tab=wi&ei=FQjlT4pT8PXhBKjU3Qs