I agree with Tiffany - start with painting the ceilings white. Use a "ceiling" paint which is usually flat. You may need to prime due to the boldness of the colors used, but sanding shouldn't be necessary unless you're spackling walls to cover nail holes. I really like the blush and green color samples in your photo. Do you have bedding or accessories that will be used in the upstairs rooms that you can pull ideas for color from? Your idea for a sky mural is nice, but that's an advanced move - stick with basics until you're comfortable wielding a paint brush. Congrats on the new home!

Is there a color in your oriental rugs that speaks to you? Can you post a picture of them?

So, is this beautiful rug for one room or do you have a pair of them? In any case, the colors in this rug are beautiful and could be used as a guide for both bedrooms. Wish I could crop out the purple in this pix - but, oh, well!

The lightest cream/white in the rug for the ceilings and a lighter version of the blues for one and the corals for the other room. The sage is an "older" color and not as cheerful for a child's room as the other hues.

You could paint 3 walls + ceiling the cream and the 4th wall one of the softer colors found in the rug. Do not know what ages the kids are or what their tastes are, of course, so these suggestions are a guess.

A simple striped wallpaper or a painted treatment for this one contrasting wall would be fun. An easy treatment for a stripe of any width is to use the same color to make stripes but different finishes - a flat next to high gloss, and repeat across the wall. This is an interesting treatment that gives the wall some interest without looking like a circus tent - or like the dreaded "you are trying too hard" look. Kids' rooms should be fun, interesting and yet have a subtle energy about them.

Maybe you should paint the rooms with a white primer (which you probably will need anyway) and then choose the colors.

The white walls will give you a neutral starting place and also give you a feel for what a light color will look like in the room.

I think the walls are too "noisy" right now to make any kind of good color decision.

But the pink does look nice on the cat. ;-)

I love Carolina Inn Club Aqua! I think it's going to look very nice. Can't wait to see the finished rooms.

Much much nicer!!!! And you're no longer a virgin :)