SFGate

Matteo Dezigns I would place the sofa along the step down from the dining room. Leave a good amount of room between the step and the back of the sofa (approx 3-4ft). Your fireplace is a focal point and your sofa should be facing it. Arrange your chairs to face the sofa, either straight on or angled in...space permitting/whichever looks better. As for your dining room windows..place a long rod across the top of the top window, that extends to the length over the top of the bottom window. Find a nice burgundy fabric and hang at the ends of the rods. When the fabric hangs, #1 (with the tall wall) will give a fantastic look to the room, and embrace the height of the wall, and #2 when the curtains hang down from the ends of the rod, it will cover the end windows of the bottom window, making 1 narrow window. This will add space and height to the room. Try it, trust!! Good luck!!
www.matteodezigns.com

jansgirl there is a firesplace in here?

Barbara Griffith Designs Frankly I would leave the furniture as is..It is the most practical layout for the space. I love the wood tone blinds. The room screams for a very large patterned rug.. every piece of furniture needs to have at least a portion of itself on the rug. In the living room I would have plain drapery panels as high as possible above any transoms that may be there, off the sides of the windows..buy6 panels, Flank the single window with 2 and the corner..one on each outside..off the window.. and two hung as one in between them in the corner. A glass & metal table between the sofa and chair and 2 small square glass tables in front of the sofa. The small clock over the piano is too small. Need a larger scale something. In the dining room you need a great rug..it could match the living room one. Simple draperies hanging on sides of the windows over the transoms...maybe same as living room. Treat both spaces as one... paint color, draperies, maybe even rug. Then "art up" the walls in the dining area..you seem to have a pretty good eye for it. Maybe a very tall mirror on a wall that parallels the table..I would suggest the left side of table..a wall we cannot see, but if there, yes.

Darzy I was going to suggest the "typical" design. Put the sofa between the windows and the chairs at the left and right of the sofa facing a coffee table. Put the piano where the chair is now by the stairs. Then a plant on the right of the piano. Ditto Barbar Griffith Designs for window treatments and area rug. You probably will have a spot for an accent chair on the right of the piano under the niche.

Barbara Griffith Designs I still like the current arrangement for this space. The furniture is evenly dispersed and not overloaded on one side I also like the angled look on occasion. I would place the rug so that the longest side is parallel to the front of the sofa.

blindsdirectcanada I would recommend a Silhouette or Pirouette blind mounted inside the frame. I would put up a Decorative rod just below the transoms and put up 24'' decorative panels to frame the window and really finish the look . I have attached a picture however I would suggest a white or cream for the blind. The picture is just to show you the look.

http://www.blindsdirectcanada.com/blinds-toronto/hunter-douglas/silhouette-toronto.html

Grace Archives Gallery walls are a classic, yet modern look. I've got tons of vintage art prints that would look great mingled in with your family photos.

www.GraceArchives.etsy.com

Carolina Photo To Go LLC You have a beautiful home! I agree with others that an area rug would really enhance your space! You can go to a local store or look on Rugsusa, JCpenney.com or Capel has a website.

If you want realistic colorful photography browse my shop on Etsy.com,nancyhehmann. High definition photography is almost as good as being there. Choose somewhere you love, have been or dream to be. The size and media can be customized to meet your needs.

MAlps Love the flooring! What is it?

Darzy Dae.23.. BTW..you have a beautiful home and it looks great. I don't think you need to worry about the furniture being too "bulky". Your funiture is working here. A small oval coffee table would look nice with your sofa/chair. If you want to mix things up, you could get metal instead of wood coffee table. But, I think glass top would feel more open.

dae23 Thank you everyone for your ideas; I've learned from some lessons from your replays. I rearranged the furniture as Darzy suggested, but I also switched sofas with my family room: now it looks "matchy matchy":) I also was shopping for a rug, but it was hard since I couldn't decide which one should I stick with. Finally, I purchased the simple one that does match my blinds and gives a little lightness to my dark floor. I throw some new pillows as well. I removed my little outdated clock as Barbara suggested, but couldn't find something new yet. So, take a look what my living room looks like today. What do you think? Should I keep the rug or should I hunt for something more sofisticated?
Thank you for your support.

dae23 MAIps, my floor is Gemwood Reserve Collection 8' and the color is Temecula ACNN393 Hickory