Blackorp, is that a green belt or forested area outside? With a view like that, it would be a nice room to relax and listen to music in.
Anyway, I would paint the room a light or medium "taupe". It will tie in with the warm tones on the floor & ceiling, as well as the neutral colour of the sofa. That, along with the area rug, will help reduce the "sterile" feeling the room has now. Plus, it won't date itself as fast as some other colours.
As far as the TV wall goes (if funds permit!), I would install a gas fireplace (centered), and mount the TV above. We've had lots of customers do this with great success. Oh, and my wife suggests a plant in the corner!
As a side note, who is that in your avatar?
