Hang drapes from the top of the wall for a more formal look and have them just touch the floor. I think the blinds will be fine with nice drapes.

I agree -- I would put the curtains that you like at the window hung fairly high -- I have a couple of rooms that have a big window and a small window and it seems to work.

Would the rod just run up to the wall in the bump out then? And not have a finial?

I would do drapes with a valance to cover the blind mechanisms...either fabric or a cornice board. I prefer that formality. Though without the valance the drapes on the side will look fine too. Place the rod wall to wall inside the nook...no need for finials on the rods....the rods just die into the wall.

Annie, there is a wooden cornice that covers the mechanisms that extends out from the window trim and looks sort of awkward. The blinds are inside mount, but the windows are very shallow, so the blinds stick out and there is a return on either side. So you would recommend covering this with fabric? I hadn't thought of that, but that may be a good idea.

You could use the narrow metal curtain rods that are all one piece and mount to the wall, rather then extending to the sides with finials. I know that's not a very clear explanation :-) so here are a few examples--

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I would not cover up your pretty trim and would just use panels to keep as much of the view as I could. As others have said, wall to wall rod. No valance.

Do want draw draperies or just panels? Either way it is fine to not have finials and do as others have suggested or illustrated with the photos. Since you are keeping the blinds you can close those and just have pleated panels which would be beautiful and add softness without covering too much of the window. I wouldn't do anything that looks heavy.

If a rod is mounted wall to wall in the nook, won't it be the case there is no extra room for stack back? Are you planning for curtains you never intend to close? Or sheers you never intend to open? I really like that you are having a more formal room.

If you hang the side panels proud of the blind valance, it will make the fact that they stick out from the window less noticeable.

But it will be completely obscured with a valance. Unlike some others here, I really like window treatments and valances and have them on most of my windows. You could also do just a valance and no side panels...it all depends on the look you're going for.

You could do something like a cornice board.

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Here are the side panels with the valance...I really like the use of the fabric pattern in the valance in this example.

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There are so many options with window treatments...maybe look at this thread for some inspiration...

Butternut, there is a bump out in our dining room and I recently hung panels on a rod with just end caps. Maybe these pics will help:

I used these rods from JC Penney in a tight spot.

Curved curtain rod

How do I know how wide for the drapes to be? I like a pleated top. I don't want them to look too skinny (made that mistake in my son's room) over that triple window, but don't want them to block too much of the window?

I think you are going to have to make a choice. If the drapes look functional and full they are going to block the windows. I would choose to show the windows.

I'm assuming you don't want to shut the drapes so just get one panel for each side of the window...they should look full enough.

Butternut, I used one panel per side (54") and stacked them close because there is only 1" between the window molding and the wall, and I wanted as much window to show as possible. You could spread out the rings (if you use rings) a little further if you like to make the panels a bit wider

It looks good on your window, 2pups, but mine is wider, so I was worried it would look funny.

Butternut, looking at your triple window, I think if you cover at least 1/3 of each of the side windows with a pleated panel that will be full enough. No more than half. You want them to look as if they are 'drawn' a little bit at least.