Thanks guys, I love the idea of the two matching chairs and ottoman. The kids are nearly grown out of the "little/coffee table" the floor tiles sound fun... we are in New Zealand and they aren't a big thing here, so I had never considered it. I'm thinking of introducing teal, to contrast to the red in the rest of the room (you can't see in the pics, but I have a massive red painting and a red rug in the tv nook.

Thanks for posting new views of your room. You are right, nothing can go in front of the paneling, and we won't block the built-in cubby. In that case let's work with the rest of the space. I found a picture on Houzz for your gallery wall. I think this will allow you to bring in color and texture and interest to your wall without taking up space like furniture would. Try to play with portraits and a couple of paintings in there too - mix it up. Otherwise I would not put anything at the top of that landing (I'd remove that console table). That picture wall should be enough visual interest to your space and it'll draw the eye to the furthest wall as you walk in your house. I would try a small piece with closed storage between the bottom steps and that door by the entry. It looks like the space is no wider than 26", so it'll be a challenge to find something that fits and is tall enough. I would not use the wooden piece you showed above because you want wider proportions and fairly narrow depth so you don't bump into it as you walk by. (something like this ) I would hang a mirror on top of primping. By the cubby you could add a single seat stool. I'm not particularly suggesting these colors for the stool and bombe chest but something along these shapes. At this point if you do that big picture wall and add these two pieces of furniture and a mirror, you might not need to hang anything on the wall above the cubby. Also, I noticed your chandelier is quite substantial for the space and hanging pretty low. Would raising it a little or replacing it by something a little smaller be an option?

Oh, okay, may need to clarify some more. If you get a new 2 seater in place of the 2 white chairs, fine, but no blue chair at all next to the 'new' 2 seater. Won't be right with a blue chair too. So what ones are you planning to recover?. If getting rid of part of it, not understanding. 2 different styles placed next to each other won't look right. I wouldn't like old blue fabrics next to new fabrics or next to 2 different styles of furniture. New 2 seater and old blue chair next to each other, not good :)

Mona you have seen exactly the dilemmas I'm facing with this room so I really appreciate your comments. I was focusing on no1, but really 2 and 3 are on my mind too. In terms of getting some continuity between the rooms I was planning on recovering the dining chairs in a fabric to tone with cushions/throws on the white couch, ottomans in a matching tone, and pulling this colour scheme through into cushions in the formal lounge. I love the spring colours at the moment (greens, blues etc) which you can see i'm playing with at the moment but you might be able to see the painting in the formal room which is orange, red and yellow with a blue/purple base. So I'm very keen on colour and so tired of the brown carpet and neutral walls. I was also going to restain the dining table and chairs to a dark mahogany colour, and change the bar stools to something more modern. re: rug closer to sofa, I've done this and it looks off-balance with nothing else in the space. It seems to work better in the middle of the carpet area at the moment. Perhaps thats because I haven't ordered the ottomans yet. I don't want to add a coffee table to this room as prefer Ottoman to put feet up on. I've attached a pic of a rug, do you think something like this would work better? re the wall: yes this is the major for me at the moment. It is a TV room so tv and speakers stay and I wont be adding any custom cabinetry. The idea was to increase the space in this room by removing all of the cabinets and they are now in the adjoining room. The speaker covers have not been painted as I needed to work out what wall covering to apply, and colour etc. so once they are painted the wall colour they will blend in better. The idea of shelving has merit, I'll have to have a think more about that... Any other thoughts you have are appreciated.