I had windows like that in a house I once owned, and I inserted stained glass panels in the three windows, and then hung drapes from the center of the space between them. Since it looks like you don't need privacy, maybe just hang stationary panels at either end, or at the end and one panel between each window. That would be four panels in all and would not cut out too much of the light coming in.

Is it necessary to cover up these great windows? I'd just keep the shades when you really need privacy.

I would suggest you opt for custom stationary drapes to "warm" up the room. Hang at the ceiling. You could use an end cap where the soffit is instead of a finial and have the drapes only 1 width. If you must buy ready made curtains (they won't look like they fit properly) I would hang under the top windows.

I like duets or woven natural blinds for texture in the large windows and nothing in the top lights.

Have you considered Roman Shades. They are easy to make and mount. Maybe some bamboo shades?

I agree with "All About Interiors" suggestion to hang the draperies near the ceiling. This will help "tie" the transom windows to the lower windows. Even though you don't have the space to have the draperies hang partially off the windows, you won't be blocking much light with one-width drapery panels. Here are a couple pictures of transom windows with full-length draperies. The last picture is a completely different idea. It's one that I did for a client who wanted some softness at the window, but didn't want to cover much glass.

I would go roman shades, as far as I am concerned there is nothing beautiful about a skimpy phony panel hung on such a pretty window. Just do romans on the lower windows and leave the uppers bare.

I definitely feel that a custom made treatments installed right below the crown molding will give you the best look. I would do a soft roman that would cover the transom windows. Here are a few pictures just to give you an idea. Covering the transoms is just a personal preference, because of glare at certain times during the day.