It's a rental so buy something that you can take with you that will work in your next home. Just stay with green and white. You may not be able to change the panels, but you could add to them where it can't be seen from the outside. Add white to the outer side of the blue panels. Then get a navy and white throw pillow for the accent on the white sofa.

This is a really awkward space! What about trying to build a unit into the corner which seems to be dead space. This could house the television and other bits like dvr,amp etc. The unit could then extend out towards the door in length and in height either up to the start of the window or up to the start of the blinds. I would suggest drawers for toy storage and books above. In this way you leave the windows clear for light plus it looks like you have a pull down screen so the tv would be out of the way of that. This arrangement would also hide all those wires and cables! Ikea have some good examples of storage which you could adapt or copy, such as Besta which illustrates the extended toy storage. http://www.ikea.com/gb/en/catalog/products/S39927155/

What a fun space! Love the pillows...I agree with above, lower all the frames, but not so low little ones can reach. The art should fall at eye level about 5'4" for walls and for behind the sofa not more than 12" above it. Then keep the width about 5" inside the sofa length on each side. Your frames are small so you need the close together for impact. I would start with some pretty curtains for the door and large window and then a simple Roman shade for the small window- since your girls play there you don't want anything they will grab hold of. http://www.houzz.com/ideabooks/query/how-to-hang-a-photo-gallery

That heat pump doesn't look too bad. It kind of blends in, and it's above eye level so it's not immediately noticeable. I like Darzy's idea of a rug to bring your space to life with some color and pattern. I'm also wondering if the TV could be moved to the spot under the heat pump? Alternately, could the TV go on the wall where your sofa currently is, then have the sofa where the two recliners currently are, and the recliners would go on the end facing the TV?