We had a room like that. We moved before I had time to tackle it. It was a difficult room to decorate and use because of the short wall perspective. I saw a tv show one day where they did a makeover in a room like that. They put wainscoting or chair rail about 4' high about around the room to break up the wall. Then they painted the upper part of the wall including the slopes above the wainscoting a coordinating color. ( I think they painted the ceiling the same color as the wall, but I can't remember.) It broke up the room so it looked more comfy and usable. I think the colors they used were a medium blue and a lighter blue up top. Blue might not be your color scheme, but I do think the room will feel better if you don't go dark.

Using that as the basis for decorating, I would break the room up into two areas. One area would be a living room setup with the tv/wii up against the tall wall and pull-out sofa and chairs arranged so they are facing the tv. The sofa and chairs could be pulled out from the walls to make the area cozy, but not claustrophic. You could have an area rug and some kind of artwork on the tall walls behide the tv.

I'd put storage shelves or bookshelves on some of the walls outside of that area in the other area. You could add another conversational or playing/reading area to this part of the room.

Shelves!

See ana-white.com and look at the laundruy basket dresser. She has TONS of plans for bookcases, storage, and daybeds.

http://ana-white.com/2010/11/laundry-basket-dresser

I don't have specific links, but try searching under terms like attic makeover, attic rec rooms and so forth as well as looking at some archived stories in BH&G and other magazines. Over the years there have been many decorating feature stories on this type of space with short & tall walls, dormers and similar attic issues and show ideas for furniture arrangments, shelving and multipurpose items; Another idea is to browse through decorating books in the library or in the big bookstores. I'll bet some photos will turn up that should help get your creative juices going.

Saw a show on HGTV. They first applied a chair-rail half way up the wall, , then painted area above bright yellow, below a fairly light blue, about the same "intensity" as the yellow, not pale nor dark. This allowed the family to decorate with French-type blue yellow and white linens, curtains, etc. Just an idea. No link, can't give an example. In my "family" room we have an L-shaped sleeper sofa and a large flat screen TV in a wooden wall unit with plenty of shelves for storage. Another idea.

Hi, Cattailgal

We have that type of room, but smaller. The previous owner had installed two sets of drawers, one on either side of the room. Our straight portion is knotty pine, and he cut it for the fronts of the drawers so it blends in. The prev. owner had backed the wooden drawers on the eaves side with cardboard, but I had DH make a regular wooden frame. You could have drawers or book cases along one portion of the wall for storage that does not take up any floor space.

I use the room as a sewing/craft room, but there are all kinds of possibilities. We considered making it a guest BR, but since there is no bath up there, decided against that. Your room would make a great playroom!

Before you finish the room, you might want to make sure the roof is completely insulated and vented. Otherwise, it can get pretty hot. You are lucky to have such a large space - lots of possibilities!

This isn't really a "decorating" idea... more of a storage idea...

We put up a lot of shelving in our kids rooms recently (to house all their toys, books, whatever) and we used MDF. It was incredibly affordable!

You can buy the MDF (stands for "medium density fiberboard") shelves with melamine surface coating at any big box store. OR (this is what we did) - you can buy 4x8 sheets of 3/4 MDF for at least half the price. I think a sheet is about $30 and you can get (4) 8 ft long boards out of it. We simply ripped the 4x8 sheets down with our table saw then prime/paint. We used a high gloss white paint so that it is easy to wipe down.

We put all the shelves up with adjustable metal hardware - so as the kids grow-up, they can adjust the shelving as needed. I let my kids pick out the wall color... bright colored walls made the glossy white shelving "pop"... plenty of storage space for all... SUPER CHEAP TOO!

Just an idea...