If you can't clean up the painted edge, you could always add a 1x3 piece of wood as molding. You can even carry it up to the ceiling to frame that wallpaper. I don't see that paint color in the wallpaper, or maybe it's a lighter version of the flower centers. Maybe stencil on a design using the darker color, or another color from the wallpaper to help tie it together. Then narrow floating shelves or vertical frames or something in the painted areas it you feel you need it. Maybe turn the bed around so the wallpaper is the headboard.

OK... but the wire wont be lower as it is fixed now. The wire in the pics below is the wall facing each other. They were leveled on equal height but the beam on one wall makes it seem a little above. But i think you guys are absolutely right that up and down lights wont look good there. I think you are right about down lights lessismoore. Would it look good if i go with two different lights on opposite walls??? it would look odd right.

Perhaps a large round table might mean a rug is not at all necessary. It could be a metal tray table, or carved wood like Rebecca Mitchell Interiors illustrates. Ideas also to consider, using multiple tables can be found at http://www.houzz.com/multiple-coffee-tables. I also agree with comments above that some color is needed on the walls. You could then hang round mirrors, or an unusual curved shape like RMI shows above.

Tsilanko, I would always recommend professional installation where needed. But what I am doing here is suggesting that WHEN you are planning to build or renovate, to consider how your plans will affect you in 20 or 30 years time. Split levels are very hep when you are young. A kitchen 3 steps down at 30 is rarely a problem, but might be a hazard at 60, or, as Marjie1059 suggested, if you break a leg. ... All my parents' homes were terrible for old people. They were forced to move to a bungalow in extreme old sge because the location and design of their home was more suitable for an active young couple with a large family than for an elderly couple with stroke disabilities. I would not want to move again, so my present home has features built in that make ageing in place simpler. Mostly small changes, like grab rails, and lever handles on doors and faucets. A major disability suddenly suffered requires major changes if permanent. I did look at this because it came up in the discussion, but if you look at the heading, Planning for Disability, it means just that. Plan ahead so you don't have to make expensive changes later on. But thank you for your advice, yes, major changes are not in the DIY domain.