I am following this with great interest as I have a very similar situation in my living room. I have had consults with several designers and they have all given me the same advice, which is to hang the curtain rod and curtains outside the windows, as shown in the picture near the beginning of this thread by saypoint. My worry about this is that it may look like a “stage” with curtains on each side. The curtains hung this way would also interfere with my furniture. I would like to hang panels inside the window area. However I am having difficulty finding hardware that would fit because there is less than 1” between the top of the window and the ceiling above (inside the “window” area). I think I need hardware that is mounted to the ceiling. But not sure that is possible or where to find it. Sorry I have no suggestions, but thanks for posting this question. I love the look of the blinds in the above picture but this seems more appropriate for a breakfast area than a living room.

There are a couple of ways to treat a round top window. As you stated, one is to have the curtain rod above the top, with curtain panels that open and close. However, for a bedroom that you want to block light, you'd need rather heavy bulky curtains. And you'd have a large stack back for them to be full enough to open/close. You could also have a pleated shade custom cut to the shape of the window. Now the last option is to remove the half circle window. I had one of those in my bedroom and removed it and replaced it with a 12" transom. I also installed an awning outside to block the western sun. I have another of those windows in a family room and had a honeycomb shade made. Honestly, though, the shade is NEVER open, so it defeats the purpose of the window, and I'm considering removing that one as well.

Thanks for the comments everyone. The previous owner had long sheers on the swing rods by the fireplace and back rectangle doors which were decorative only and looked a bit frumpy - especially with the radiators. The original owner (from photos) had heavy large, lined velvet drapes across all three window walls along with hardware on the lower two thirds of each window/door holding permanent sheers across each door and window using a top and bottom rod. If I find the picture, I will post it. It is sort of fun to see. (This is a home that has been in my spouse's family at different generations.) The floor shown is actually the pine subfloor that was under the original horse hair carpet. While the wood is pretty hard given its age at harvesting in the 1930s, it has cracks, splinters, and (in some places) half inch gaps between the boards with light from the basement showing. When the last owner refinished it, they tried filler in the gaps which has been popping out. ddeegw - I would be interested in knowing your thoughts behind not going too cool in the room- especially if the trim is painted a white shade. The intent would be to go into the white family. While I feel bad changing some of the original decor in the home, much is damaged, and the home feels very dark and sort of "dingy/dirty." All of the original light fixtures used that yellow tint glass shade and walls were very yellowy.

All three windows should have blinds or shades on them. Shades are available with narrow headrails for shallow depth windows or you can mount them outside. Windows like that look better with panels on the outsides only, but they need to be wide enough (or hang more than one at each end) to at least look like they can close. The rod needs to extend out much further, not just to the end of the window. They also need to touch or almost touch the floor. High water curtains don't look too nice.