A plasma will most definitely outperform an LCD in a room where there will be a lot of direct light exposure (it's all about brightness and contrast ratios). Yes the incidental glare could be a problem, but that's going to be a problem with ANY display device.

You know what, I would move in, place your current furniture and live with it for a bit, then you will have a better idea. We jumped the gun on a couple of rooms in our current home which we moved into 4 years ago, and I wish I'd waited a little bit to get how we use the room, etc. That triangular area doesn't have to have anything on it...it could stand alone as just an architectural detail. We have some of those in our living room, & I've put nothing on them & it looks fine....depends on if you feel the need to decorate up there. I agree with Shannon that I'd put an additional chair, if you use one, on the side opposite the window to balance that area or if that piece housing their tv isn't staying, you could put your longer sofa along that wall, thus opening up the beautiful bay like window & put the chair on that side for reading. Where are you putting your tv...is the large piece staying? You could put your tv above the FP, maybe. If you have wood blinds, you don't really need drapes, unless you want the softness of fabric. I would leave that decision for a bit. Christopher Lowell (from hgtv, etc.) has a book on the seven layers of design & he advises window treatments, accessories, etc. as probably the last step. It is a beautiful room, BTW, and I hope you'll post as you decorate it!! Good luck!

Napoleon makes OK fireplaces, but their efficiencies are terrible. The P4 Energuide efficiencies of their Luxuria Series of linears range from a low of 38.8% to 52.5% Which means that in the case of the LV38N 61% of the gas you pay for is wasted and the best LV74N almost half is wasted. The Valor Linears range from 66 to 70% P4 Energuide efficiencies. The Heat Shift allows TVs and other heat sensitive items above the fireplace as well as combustible wall materials up to the fireplace opening. Here is the Heat Shift Video.

I would lean artwork there -- a framed painting, print, or photo -- and make sure it's large enough to have a "presence" against that pretty fireplace. I would not put a mirror there, as you'll be reflecting nothing but ceiling or the upper portion of adjacent walls.