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But we do think whatever is showcased inside would be well served by some soft mood enhancing lighting, whether it be installed shining below or from above (we think our time at the Museum of Jurassic Technology this past weekend has greatly impressed us about the importance of proper mood enhancing spot lighting). Also, painting the inside of the niche in a colour that compliments whatever object placed within and the colours around it (i.e. the glossy red you plan to paint) would help highlight the object and also bring an additional element of colour into the rest of your home.
We do see an issue of visual overload occurring in that particular space, as you've got the television, the painting and the niche all vying for attention. Sometimes less is more, especially when it comes to home entertainment areas. Personally I'd rather see solid doors where components and accessories are hidden away, bringing the focus back to the screen, the niche and the painting behind the set. Have you considered putting up curtain, to create a theatre effect? This way, you can neutralize the two competing spaces; when you're not watching television and close the curtains across, the niche takes center stage because of the equal plane of wall and curtain. It's also another opportunity to bring in colour.
Perhaps our readers with wall spaces similar to your own may have some good suggestions. Any good suggestions out there?