It's a hard one. I'd say divide the space for both uses: a musical center, and a place were you can watch tv, listen to music and maybe have some friends for drinks. I'd use a screen between the doors, to promote good flow in the room.

I'm out of ideas as for the rest, but waiting for others to comment ! (I also have a very long room to arrange, and no idea on how to do it well).

It's hard to tell from the floor plan how long the room is, but if you definitely want to have a sofa I think I'd use it to break up the space. Maybe have it facing the windows, just on the dining-room side of the fireplace. Then you could have a couple of comfy chairs near the windows facing the sofa, and the musical instruments could go in between the back of the sofa and the dining room.

As for the always-annoying matter of the TV -- if there is any way at all you could wall mount it on a fairly long and flexible swivel-arm on the 60" stretch of wall just past the doors to the hallway, that would be fantastic -- then you'd hardly even notice it when it wasn't in use. All your other stereo equipment could go there too. But I can imagine the doors causing problems there (I assume you'd only have a clear 5' when the doors were open, not closed.)

If you couldn't do that, I think I'd try to set up the TV situation to be somewhat mobile -- I'd get something low, wheeled, and 36" long that you could keep in the front right corner and move out a bit when you were using it.

It's a beautiful place! Good luck!

You could experiment with mounting the TV in the 60" space on the far side of the doors to the hallway, so it would really be out of view when not in use,

Oops. I meant you'd only have a clear 5' when the doors were CLOSED, not open!

I'm a "tv centered on couch" kinda girl so I would put it on the 4' span between the windows at the top. Put the couch perpendicular to the fireplace just on the other side, as already suggested. Arrange the music area between the tv viewing area and the dining room. That 4' span on the right wall looks great for a keyboard. Add some chairs across from the couch and try to make the tv as inconspicuous as possible with a low unit.

TV between the 2 windows and arrange the furniture around that. Not all the seating has to face the TV and you can put the couch with its back towards the dining room.

Don't stress about it too much, you'll find out how you like your furniture best after your first Christmas there. You end up moving everything to accomodate the tree and then everything happens to fall in its perfect place after that.

Its hard to visualize without knowing what furniture you're working with, but I'd make the fireplace area the "music room" and keep the television are at the back of the room. The front would be more like a formal living room, while the back would be more oriented as a family/TV room.

Assuming you don't have any furniture and you're starting from scratch:

You could easily do a sectional sofa in an "L" shape in front of the windows at the bottom right. The TV and stereo system could go on the long wall just above the door to the hall. If that door isn't needed, you could keep it closed and position a chair in front of it. A few overstuffed chairs could float in the middle of the room - have them face the TV when you're relaxing, but turn them toward the fireplace when you're entertaining or playing music.

Use the walls/corners at the top of the room for instrument storage and have a few smaller furniture pieces that can be easily rearranged for versatile use (a loveseat instead of a sofa, ottomans instead of coffee/end tables).

Both areas will be better defined if you buy good rugs to anchor the spaces and the furniture.

Our living room has a similar layout and square footage. We did divide the room in two parts using the sofa and a rolling console unit as partitions. My flickr feed might illustrate this a bit better:
http://www.flickr.com/photos/k2yhe/sets/72157623784874757/

I would be kind of inclined to divide the living room into 3 parts, if there's room.

1) Put the music section along the wall to the left of the fireplace (as you face it.

2) Put 2 or 3 comfortable chairs and a coffee table or ottoman in front of the fireplace for a nice conversational/reading area.

3) Then use the area to the right of the fireplace as the tv watching area. Possibly with a sofa or sectional with it's back to the fireplace and the tv on the wall either side of the door to the dining room.

I meant 'with its back', I really really hate missplaced apostrophes but my fingers don't always agree.

I would put the TV either in the corner between the two windows (top right on the floor plan), or inbetween the two windows on that wall (top wall), as LovieDovie already suggested, so the TV isn't really facing you when you walk into the room. Then I would either do an L shapped sectional or 2 sofas/love seats in an L shape with one side facing the fire place (leaving a passage between the back of the sofa and the wall for walking) and one side facing the window/TV (top) wall. That would divide the room a bit, and on the other side of the room, I'd put the music stuff and some more small scale seating - arm chairs or rocking chairs or something. A round table with a couple of chairs infront of the 2 windows on that side of the room would be nice too (for games, working, food space when entertaining, whatever). I love all the details in this room - hope you do some persian rugs with red tones, some nice leafy green plants, and some long simple drapes on either side of the wondows - linen, or silk would be nice - something that's pretty airy. Have fun!

That floor register by the fireplace may be a challenge for the couch... Otherwise it depends a lot on how you will use the space, traffic pattern, etc. Since the Entry Hall is on the left in the diagram, I wouldn't put the TV on the fireplace wall or in that corner. Between the windows on the top is an option and esp. if you like to be able to see the TV no matter where you are in the room (or even in the DR), this is the best place I can see. The music area would be closer to the dining room.

Agreeing with a couple of others that you could try floating a couch in the middle of the room just "south" of the fireplace, then putting the TV between the two windows that you're facing in the picture. If you can hang your TV or put it atop your stereo cabinet, that looks like a good way to have balanced speakers without having to have wires everywhere (if you're not lucky enough to be wireless). Then you could add a couple of armchairs facing the couch for a conversation spot around the fireplace and a console behind the couch that would provide storage for some of your smaller instruments and room for a lamp and/or drinks tray on top. Assuming you usually first enter the room through the French doors, you'd get a sort of symmetrical, welcoming living room that way.

Then the area between the dining room and back of the couch could become the music room, perhaps with the piano on the "southeast" 48" wall next to the dining room door. Of course, it's a little hard to tell if the measurements would all work out and you'll have to deal with the heat register (we've got those, too). But then you could add something like rolling ottomans that you could use in the music area or wheel around to be in front of the fireplace for parties. Any way you can add a built-in window seat/bench underneath the two southeasterly windows, the ones to the right of the fireplace? That could give you some more music/book storage and seating and balance the fireplace visually.

Your house looks like a bungalow like ours. We love the open spaces and big windows, but it makes furniture placement hard!

Sounds odd, but would you hate if it were mounted between the two windows on the wall? I've found, after constant re-arranging, that my tv is best on the wall with windows, because then I don't get a glare from them onto the screen.
and as some of the others have said, face the sofa towards the windows, maybe two low-arm chairs facing the sofa at an angle to allow 'optimal channel surfing'. that will still leave the fireplace to be viewed.
then, i believe as some of the others said, place you musical area/dining area behind the sofa.
it would all depend on the dimensions of all of your furniture, but barring you don't have a gigantic sectional (like me), you should be fine.

oh, and with having just 2 chairs facing the sofa, you should still have enough walking space to get to the 'Door to Entry Hall'
=P

Thank you for all of the comments! (Sorry not chiming in sooner. I spent the day refinishing the floor, so I wasn't able to check my computer earlier.)

There are a couple floor plans suggested that I hadn't thought of before, so I am excited to see how they work. We will be using the furniture we have for now, but upgrading over time. I'm hoping that we can tentatively try out some of your ideas, so that we know what would be good to get in the future.

k2yhe, your living room is beautiful (and does have some similarities that will help us.)

mediumgoof, it's actually a Victorian (built in 1880.) The living room used to be two rooms, apparently converted along time ago. We will be living in an older neighborhood, so finding such a large living room feels like a great luxury.