What is the style of your house. You have a very unique design element here. I would say it is a shame to destroy it; personally I would paint it and update the surround - but - if you can't live with it, I would step back and take a look at your entire house and try to stay within those design parameters. You don't want to have the fireplace clash with the overall house/room design (a melon in a cornfield is a weed). It seems to be MCM so don't go too Colonial, Victorian or Tuscan. Ask yourself, "what do I want from this room?" and don't just focus on the fireplace. I hope I have been of some help.

I think updating the material on the fireplace would be a great way to refresh the space. I love the idea of a natural stone tile...maybe a natural slate or a travertine...there are even tile's now that look like wood, which may be a really cool touch for a fireplace. There are also some "hard surfacing" tile options that would add great texture and dimension to the fireplace, really making it a focal point. Check out our projects photos for design inspiration. As for hardscaping, Solistone offers this textured style in their "Modern" and "Cubist" series.

Check it out here:

http://www.solistone.com/mosaic1/stone/modern?cate_id=67&pid=51&pro_id=122

http://www.solistone.com/component/product/?cate_id=65&pid=51&pro_id=116&Itemid=198

textured slate idea:

http://www.solistone.com/index.php?option=com_product&cate_id=47&pid=51&pro_id=142

Hope that helps!!!