After reading all the wonderful advice, here is what I did:
I decided to take down the bamboo shades and hang the black curtains and cream rods I already had on the smaller windows. I also hung a decorative rod for the black curtains on the picture window.
Here is what I still plan to do:
Purchase curtain clips for the black curtains to hang from the rod above the picture window and move the sheers to hang behind them. I plan to keep the sheers closed when the black curtains are open. Putting them behind will solve the problem of them being sewn unevenly by the manufacturer because that part will be covered and having the sheers closed will create some more privacy when the black curtains are open. I will likely add clips to the new black curtains on the smaller windows as well. I also plan to make tie backs in a colorful, patterned print for all three windows in order to tie them together even more. If you can't tell from my photos, I'm a "matchy-matchy" kinda gal!
Now for the photos...
After (my daughter, of course, thought I was taking a photo of her!):
Ignore the table in the corner by the couch... it is a temporary solution for my husband's "office." He has yet to use it since he prefers sitting on the couch, but it has to stay there until the office has room for it!
I also created a "window seat"/reading nook using an old coffee table, a GW cushion, and a couple garage sale pillows. It is actually quite cozy!
You may be wondering what I did with the bamboo shades, I actually put them up in my daughter's room. She used to have brown curtains that blended in too much with the brown trim. I like these much better and they work much better in her room than the living room!
Ignore the paint, that is a work in progress. We are adding a chair rail and plan to paint over the stripes with a creamy tan color.
The other dilemma I posted about (in October) was my bathroom cabinet (you can read about it here: http://treasuredinmyheart.blogspot.com/2009/10/bathroom-cabinets-decorating-dilemma.html). I have not done anything to fix it yet but I plan to paint the cabinets linen white (leftover from another paint job) and spray paint the handles oil-rubbed bronze. Eventually, I want to also remove the doors from the linen closet and hang fabric over the lower half and put dark brown baskets in the upper half. This will require a lot of work since the inside of the cabinet is currently painted sea foam green and fire-engine red!! Those doors are hiding a lot!!