Thanks everyone! My struggle is that I worry if I hang drapes between windows can appear "squatty" as torreykm mentioned. Although the ceiling is vaulted but the rooms are on the small size, that's why I am concern. I do love the dining room small windows too! I like the idea of roman shades for the two small windows! I will look into those. Maybe I will get roman shades for the living area as well if I can find one that I like so that it will tie to those two small windows! Got some roman shades research to do!! Thanks all!

Honestly, the whole scenario is wrong. (Removed sentence about rods since I just noticed you're getting new ones). I wouldn't go up more than 3", but they do need to go up above the window. Because there's three windows, it looks like you forgot to do the middle one. There should be one panel between each window. The ones at the end, should extend out a bit past the window. If you really want to stick to your plan with just one at each end, then use either one long rod across all the windows, or put up those shorty rods at the ends and extended out. Rods only at the entire top of the end windows look unfinished somehow.

I originally planned to do a roman shade, but a friend suggested fun curtains and I fell in love with these. (eld616, I will have to check out that roman shade site, it looks cool). I had envisioned hanging them like Partim suggested but when it came time to hubby hanging the bar I started googling how to hang curtains and panicked. My children are 10, 13, and 15 y/o so I am not worried about Tarzan scenario, lol. Very good comment from Yvonne about the illusion that stairs aren't there; I hadn't thought about that. I still really want to use these curtains as I found coordinating pillows, a clock, and cool frames for pics of the kids surfing and at the beach. I think the comment about hanging them high and it looking formal is a good point. Also, even though I am 6 ft tall, I don't think I would be able to open and close the curtain on the stair side if they were hung too high.

Do you want curtain panels that you can close to cover windows or have you considered pleated inside mounted shades that can be pulled up to open? or, you can have both. Are all the windows visible to each other - one big room or closed off from each other? The living room windows obviously in same room so if you do curtain panels they should be the same kind & hung at same height. They could each have panels that open & stack to each side & the 2 windows by fireplace can also be treated as one window with one rod across top. The height is limited to just under the soffit on FP wall for both sets of windows since curtains should be hung from same height. your sliding door could have 2 blinds on one headrail that is outside mounted & hung above the top window above the slider. With two blinds you can open one side to go out the door & leave other side closed. Kitchen window looks like inside mounted blinds are best as no room for drape rail with soffit & drapes not usually good choice for kitchen. I think blinds are best bet for all windows & add drapery panels to Living room along with blinds if want for softness & decor.