Wood shutters would be a good choice and allow the most control of both light and privacy. It looks like your windows have plenty of depth to accommodate them. The problem with roman shades is they are either up (letting in light but giving you no privacy) or down (creating privacy but not allowing any view and only minimal light).

Thank you Susan! My concern with wooden shutters is that they may look out of place if they are the only windows on that level with that type of treatment? Other windows have wooden slat blinds. Thoughts?

Have you thought about top-down/bottom-up cellular shades? That would allow for privacy and lots of light too. Then maybe add a decorate fabric valance.

Woven natural blinds with / light filtering or blackout liners with inside mount. Get them with continuous loop pulls and add a contrast edge binding for detail and to avoid fraying on edges. Lots of options from Smith+ Nobel, The Shade Shop, other web-based businesses or call a local shade/blind shop or decorator to save money and arrange easy install!

Your room would "pop" with the right window treatments!

You still have room above the window frame to add a decorative valance or interesting "topper" later that could be a fabric with decorative trim or nail heads. Use a great geometric fabric for topper/valance or fixed drop shade and use this same fabric for pillows on the sofa to pull the look into the room!

Again, these details would add architectural interest and help balance the scale of your room! Happy decorating!

I would use the smaller 1 3/4" wood shutters that have a more traditional look than the large 2 1/2"-3" ones that you see lot of these days. I would think they would coordinate with your existing wood blinds fine. I would match them to your trim color.

I would probably use 2" wide wood blinds in white or plantation shutters that are 3" in white. Both of those types would let in a lot of light and look very architectural. I would also consider pairing down some of the furniture. It looks like it's pretty tight space and might function better with less stuff in that room.

Well, maybe this photo of your living room with shutters in it will help. The shutter on the right didn't paste well, but you get the idea. Sometimes it helps to use a photo editor to place objects in the room you want to re-design.

Whether you're looking for elegant draperies, roman shades, wooden blinds or a simple swath of fabric, there are modern window treatment ideas that will complement every room in your home. Today I am adding additional information and pictures to my post on window treatments from December 19, 2011.
http://designsenseflorida.blogspot.com/2011/12/window-treatments-enhance-your-room.html or my ew post Interior Windows Too: http://designsenseflorida.blogspot.com/

I'd use the same wooden slat blinds you've used elsewhere.

hunter douglas silhouette type

I think the best window coverings for your windows are inset small slat wood blinds with side drape panels . Wood shutters look nice but make a room dark - your windows are small so those would be too much wood.