Would need a major overhaul with new flooring, cabinetry and furniture.

That's quite a different style from what you have. Your current table fits with the last photo - just paint accordingly and buy the Ikea chairs. To update the rest of the kitchen, paint cabinets white and switch to more modern hardware. Also swap out the country style light plate and remove all the art work. Keep it simple, per your idea photo.

Yes we will do big items when weather gets a little bit better but for now I am looking to update the eating area with new chairs, art....

Hi sondra . . I like your cabinet style and think that with some paint, cushions and new chairs plus a little rearranging on the wall, you could get a look you would like that would head in that direction I want to suggest you play off the wood tones that you have now though - but go for a graphic fabric on your bench as the starting point.
If you sew, make these without the tufting / buttons so they are sleeker . .Here's the fabric that will be sort of retro modern to help pull it together. It has enough rust and chocolate to pull in all your wood tones, but offers mroe to work with. http://beautifulfabric.com/asccustompages/products.asp?fav=0&fpage=1&page=1&categoryID=72&productID=9094&pStart=0&recNum=88
I would not buy ikea chairs now, but maybe look for some yard sale finds with cleaner lines or take the two you think you want to lose, and paint the two chairs with the dark teal in the fabric . . something close to sw great falls - terrific with the wood tones http://www.sherwin-williams.com/homeowners/color/find-and-explore-colors/paint-colors-by-family/SW6495-great-falls/
in a modern paint color, they become eclectic and funky instead of just rustic - or if you find some at goodwill with decent lines, paint them . . use semi gloss so you can wipe them off easy . . add chair pads to these - just squarish pads with plain short skirts and velcro closures.

Don't paint the benches . . they and the table work together. Close down your table to the circle.
This fabric requires we paint the walls however, because it has a warm back tone and your counters and spash are very white - so your trim will be white and the walls need to move down (like the inspiration photo a bit) to bridge the warm gap between the white trim / counters and the wood tones. It needs to work with your floors, but be neutral = best guess is sw kilim beige.

Then, your wall has too many small things scattered. Keep the piece on the left and add more to make a small grouping of neutrals on the smaller wall, then one larger canvas of modern art on the bigger wall - look for one you love with colors that echo the fabric. Get a manzanita branch and put it in the corner to stand over your table. Wire it with fairy lights and put the thumb switch where you can reach it in the corner behind the branch. This might be a good time to change out the switch plates.

Can't see your lamp, but you may want to shop the thrift stores for something that could be transformed with some orb paint. Just look for lantern like lines -

Don't try to be others, just be yourself style. Vintage or rustic style is best for your kitchen. Get large wall art, and one floor lamp or table lamp. You will have a wonderful kitchen and dining room.

My pendant. I am ok with it,it has a retro vibe.

Honestly with a little work this could look great. I would paint the cabinets with Annie Sloan chalk paint. Pick a new back splash and countertops. Then, but the chairs you like and paint the table to look exactly like the one in the photo. Get a nice pot of flowers and your done! Oh, and recover the breakfast nook bench thing with a pretty fabric you like.

The place you have those few things behind the breakfast nook you could put a tall vase with some branches like the photo you like

I would suggest painting the cabinets the Annie Sloan chalk paint color Paris grey

If you love the look - head that direction! Paint the base of your table white and remove the leaf from your table to make it round. Remove the bench and the two chairs completely and purchase the best quality lucite chairs in your budget. Remove all the small art and reprint the wall with a touch more gray. Select one large piece of graphic art. Replace the switch plate. Lastly, remove and replace the ceiling fixture with a barrel shade chandelier. Enjoy your new dining area as you gather likes for the remainder of your kitchen!

I changed my mind.. Don't paint the cabinets... Just back splash and countertops

I think your kitchen is pretty, too. You could just liven things up a bit with some paint, maybe some new art for the walls, and a fresh new centerpiece for your table. A few colorful accessories would go a long way.

I posted breakfast nook on Craiglist for sale, I just wanted to see if anyone would be interested.But I know it won't be sold easily unless I offer it for really low price. And I don't have a plan what would I buy instead.

I would for sure paint it. I think if you go buy some white paint it will look quite different. We just did ours with Annie Sloan and it is a different place. IT was an easy weekend job.

I would paint the eating area. NOt the cabinets. sorry

Maybe try the opposite- paint the bench white and get a glass and chrome table. Swap out the chairs for Lucite. Upholster in a pop color. Get wall planters.
http://www.pinterest.com/wonabae/hanging-wall-planters/

If you remove the breakfast nook, you will instantly update your kitchen by about 40-50 years! Then you can get a new table and chairs more to your taste. You may not need to do any other upgrades then.

Selling the breakfast nook is a great idea. After it's gone, wait a week or two and figure out what you truly need and want out this space. You could duplicate your inspiration picture easily I think. Paint, hardware and better wall art will go a long way!!

If you painted your kitchen table set/seating in the darkest green of the upholstery, it would all of a sudden take on a designer quality. You could distress the paint after it dries to give it some character. You'd have a nice contrast against the white walls.

If it doesn't work out, you'll sell it. ;) I think someone would more readily buy it painted than if left 'blonde'.