Replace your curtain rods with swing arm rods to open up the room and allow more light in. Windows appear to be bigger than they are, too. Love swing arm curtain rods, I have been on the hunt for old ones for a long time.
This is a unique way to show off lace curtains. The top fabric can be an off white such as this, a different color lace, a print fabric or can be a solid color brought in from accents in the room. The pleating is called "Ripple Fold"