I know why I think the curtains must go. Why do you think they must go : ) ?

Are you painting the mantel as well as retiling the fireplace? If so, what color?

Edited to add: is all the trim going to remain bright green?

Are privacy and light control concerns regarding all of the windows?

How many windows in total, and what's your budget?

Mrs b, if you have an Ikea near you, they have very good quality linen curtains -- Aina -- in various colors, including white, natural, gray, and aqua. They're only $60/pair and come in longer lengths. If you can sew, you can add trim to them,

http://rosabeltrandesign.blogspot.ca/2013/02/customizing-inexpensive-drapes.html

I'd also suggest replacing the curtain rods with plain black metal rods, which you can also find at Ikea.

Pretty rug : ) .

I guess I have an excuse to visit Ikea. ive never been there.

If you want to go with curtains, $60/pair is about the cheapest I know of, and it's very good quality at any price point. Maybe others have some good ideas for other curtains at a comparable price (I'm in Canada and don't know what's available at Target etc.).

so so you think.I need to the floor drapes?

If you want curtains, they should be to the floor. But you could have shades of some sort, bamboo or Roman.

and should the walls be painted a similar color I.e beige

Do you like beige? Do you want beige? It seems to work well with your existing furniture and the rug.

Mrs b and peppa, I love the curtains WITH bamboo/woven blinds in peppa's room above, but recommended one or the other (vs both) for Mrs b because of her stated very skimpy budget. I figure the other layer can always be added later on when the budget allows...

Love bamboo and roman shades! I know roman shades can be quite costly though. You may want to check out bamboo shades at Home Depot/Lowe's. I recently purchased some that were surprisingly affordable (online) roughly $40-$80 per shade, depending on the window size. You could also check H&M home for linen curtains, which is where I purchased mine for quite the deal and they are beautiful.

Either bamboo shades or curtains work with/complement your room. But they offer two very different looks, so you have to decide which one you want : )