Get very simple panels that go about 3" above and below the window frame with a simple but decorative curtain rod, and do the same for the large window. You want to frame the window like a piece of art, which is what you would have there if the window weren't there, and by having both windows with the same treatment you won't notice the odd size.

Do you need to cover it? I actually like some small windows here and there, but left uncovered, or with a stained glass piece hanging in front.

Perhaps you might like to consider a stain glass look.

Yesterday saw at TJMAXX faux glass that was $25.... also look at homedecorators - they have a huge selection of larger pieces for about $130, if on clearance for half that.

I bought a faux one for our cottage - from a distance it looks authentic, everyone has a positive comment.

Here is a link that might be useful: art glass

I'd go with the stained glass too. That window is begging for it!

I agree with the stained glass - I think it's brilliant. Add drapes to the large window and just treat the small window like art. If you can't afford it now, HD/Lowes sell the plastic stained glass film. My mother used it in her bath and if done right it looks really good.

I'd also go for the stained glass instead of panels.

A few weeks ago, on one of the TV home shows, they had a situation like yours. They ended up doing panels on both windows with shorter ones on the smaller window. We hated it and thought it looked just like basement 'rec room' windows.

Hmm . . . when we first moved in, stained glass was my first thought, too. Two possible problems, though:
(1) There is no trim around the window except the bottom ledge. I think it would make the window look stark and cold without anything around it. (Putting up trim is a future plan, but not something I am going to do now.)
(2) The windows are the kind where they slide from side to side, so there would be a big line in the middle of the stained glass that I think would show through.

parma42-- yeah . . .if I get the short panels, I am afraid it will look exactly as you said-- basement rec room.

Here is a pic of the POs' decor . . .you can see the window with short panels.

How about hanging a framed piece in front of the window - from chains in the casing above the window?

What is the view and do you need privacy.
If not what about panels on the larger windows and matching roman shades or fake roman shades on the small window,

Yikes, I would save your little pennies up and bust that baby out, replacing with a stationary window. You could then do the stained glass and have a horizontally placed accent piece the same height as the window treatment on the other wall.

You have done such a beautiful job with the room so far! Truly a before and after.

If you're not willing to take things that far, then cover it with a wall hanging hung from the same type drapery rod you use on the other window.

The window needs either a taller piece under it or something that changes the apparent length of the window in proportion to its width. What if you moved the high backed chair under the window and moved the loveseat to the other side of the rug?

valzone-- is casing trim? If so, there is no casing above the window, so I dunno how it would look.

lyban, no need for privacy, view is OK. I like the idea of Roman blinds, but that leaves me still with the question of the sides of the window since there is no trim. What do you think?

parma, tell me about it . . .my big dream was to block off that window completely, put in a fireplace there instead, and then put 2 stained glass windows on either side up high (like a craftsman home). But, no money to do that now, it wouldn't suit the house, and it just wouldn't be worth it (I'd rather move to a house more my style). And thank you for the compliment! It is still far from done, just slowly working on it as money, time, and ideas allow!

suero, you hit the nail on the head with the proportion problem. Unfortunately, there is no wall opposite the small window. It's a tiny room. The other side is a little walkway leading to the rest of the house, with columns that also serve as closets. I've rearranged the furniture in there many times, but this is the only arrangement that will work, I think (since DH is DEAD SET on leaving his %$^ flatscreen where it is, but he leaves all other decorating to me, at least).

Does anyone like my idea of a swag? I thought maybe it would cover the top and sides without (hopefully) giving it that rec room appearance. But maybe it would still look like a disproportioned window.

For some reason I thought that the window was set into the wall, but now I see that it's flush...that rules out my idea. I think that a roman shade would be my second choice.

What does the window look like with no treatment at all? Can you post a picture with the blinds off (or at least the blinds pulled up)?

My sister has similar windows throughout her house. (Her's are the crank style. It looks like yours may slide open.) I think they are charming and very modern-farmhouse/Pottery Barn style.

Do you have a narrow sofa table that you could slide behind the loveseat? Try placing a lamp and potted plant on the table and see if that helps fill in the gap between the window and loveseat. (It might look funny since you don't have a lot of floor space to spare, but you won't know until you try.)

FWIW, you have done a great job with that room. I love the yellow walls with the crisp white trim and the new, white fireplace.

Here's what it would look like with all matching curtains.

{{!gwi}}

Jodi-

Jodi, that looks good! I'd say problem solved!

Or if not, you could add a couple of pieces of art, large enough and the right shape, to fill that gap on the wall behind the loveseat. Leave the window bare and it would become part of the composition.

Jodi has a similar idea to what I was going to suggest. Only I would have added sheers to both windows leaving the panels open on both windows and no valance. You could possibly add a mirror from below the shoret window to the floor. That way it would look more like a window behind the sheers.

I can't photoshop anywhere nearly as well as some folks here. How about shutters?

Two sets, one to fit the window that actually work, and a stationary set below the window to give the illusion of a taller window.

Maybe someone could photoshop that?

Thank you, everyone . . .your thoughts have really helped.

I love Jodi's work. Very tasteful! However, when I sit in the room to visualize it, I think the curtains would just get too smooshed behind the loveseat. If the room weren't so small it wouldn't be an issue. I could pull the loveseat out and it would be perfect!

I think the idea of a Roman blind or balloon shade (or something along those lines) will work best. It will leave the bare window showing, but I think it's the best option.

THANK YOU!!!

How about a nice shoji or other room divider to go behind the chair. It breaks the view of the window, would let light in if you get something somewhat see-through and will add visual interest to the room.

Here are shoji screens we are using in our informal dining area until we get window treatments.

{{!gwi}}

Jodi-