I'd say definitely under the border, above it would just look strange and would destroy the effect you're looking for.

Start from the bottom of the brown moulding .This way you are not breaking the brown trim that goes across the room .Unless you want to give it height which you dont need to.It would be best to keep it clean.

I normally would hang them from the ceiling, but in this case I agree with the other posts.

Okay, so three against one:

The area above the wood molding and below painted white molding is where your curtains rod should be.

I agree with patrick - hand them just under the upper crown molding. Usually I prefer hanging curtains just above windows, but in this case, I think it will give the room a strange, sinking look, even though you have tall ceilings. You need to break up that dark horizontal line a bit. The windows are pretty closely spaced, so the dark molding between them will barely be visible between each window once the curtains are up.

Paint the molding.

Take the guesswork out of this! Tack up some sheets (or other long fabric) in both positions to get a sense of what they would look like. Granted, it won't be perfect, but I bet you'll quickly get a good sense of which way you like it. Then let us know!

mhm -that is a good idea.

I think a track going along the wall or rods in the middle of the window-wall molding will be distracting. The molding showing between the curtains even sounds very appealing to me! People paint stripes and place chair rails even between windows. This is really the same concept.

I don't like curtains hanging from the ceiling. People always say it makes the window look bigger or the ceiling higher. I think it just looks like they are hanging from the ceiling.

I say hang them either just below the crown moulding or just above the dark trim.

The issue you have is that the dark moulding is also the casing at the top of the windows - If you hang your rod(s) below this moulding, the result will be an unsightly gap at the top of the window opening and above the drapery panels. Look at any photo in a drapery ad or catalog, and you'll see what I mean: the drapery rods are nearly always mounted above the window moulding.

The other issue you have is that the dark wood trim creates a strong horizontal line that makes the room feel lower than it really is - IMO, you need the verticality of the draperies taken beyond this heavy dark line to make the room feel taller and more graceful.

Hang the drapes below the painted molding and above the stained molding. Lovely, dramatic, and will break up the very strong horizontal line of the stained molding. You can mount roller shades or blinds inside the casements, so the windows will still read as separate elements. It will look great!

Also, I'd consider painting the walls a richer color to minimize the contrast between the walls / wood trim. This will actually enhance the look of your woodwork.

I have similar woodwork throughout my living and dining rooms, and always thought it "took over" the rooms because it was so strong. I considered painting it out to match the wall color. But after 8 years and as many paint jobs, I finally got the wall color right. Now the molding looks spectacular. I'm so glad I didn't paint it. (Oh, and don't forget about your ceilings...)

I like the idea of breaking up (or even covering up) that dark line of molding.
I vote for just under the white crown molding.
That will be the closest to the photo you like so much.
Don't hang them from the ceiling...that just wouldn't look good, and the crown molding is nice.
I totally agree with bepsf...in that
it will definitely give a tallness and gracefulness to the room.

don't do drapes at all but roman shades with inset brackets (inside the window).

I've had a very similar set of windows and that same curtain dilemma: I hung the curtains with tension rods, in the inside frames of the windows to very good effect.

I believe that molding may be a picture rail...you know, a rail that you can hang pictures from, rather than poke holes in the wall, which are likely plaster. I would vote hanging walls to the ceiling, but keep in mind, if the walls are plaster, use the right hardware to affix the curtains.

Also, is the molding painted or stained? If it is stained and that is the original patina that's one thing, but if it has been merely painted brown to mimic patina, then you may want to consider painting the molding in between the windows white to make them recede into the wall.

I agree with most people to hang the curtains under the crowned white molding and above the wood border.

However, you should keep in mind that the ikea kvartal curved tracks are designed to be hung from the ceiling--not from the wall. I have a bay window but instead of going with kvartal tracks, I went with curtain rods. The only complaint I have is that I don't get the option of sliding the panels at the corners. So you'll have to improvise or go with something other than ikea if you really want the panels to slide back and forth at the curves and corners.

Please let us know what you decide!

Is painting the molding really out of the question? If you're renting, maybe you can try negotiating with your landlord. They might be okay with it if you match the lighter color of the wall and buy the paint yourself. You could also offer to have a pro do it if they don't like the idea of you painting.

But if you really cannot paint, hang the curtains high and make sure they are very opaque so the molding does not show through. That heavy, horizontal line needs to be broken up.

Under the molding. The curtains will just look weird hung above since part of the molding will be hidden.

I have the same moldings and I hung mine above, almost to the ceiling. It makes the room taller, the windows look larger and is amazing overall.

Try it. You won't be disappointed.

One option I didn't notice would be to hang the curtains form the ceiling, and add a band of fabric to the tops of the curtains to mimic the molding. (Assuming you LIKE the band of molding to be continuous.) You could sew or use that iron-on tpae to apply the fabric band to other curtains...

When in doubt, listen to Patrick.

The horizontal line of the molding is visually dominating and really shortens the room. I agree with those who say that it needs to be knocked back by hanging the curtains above it. I don't know if you're renting and not allowed to paint, or if you just like the molding and don't want to paint it, but if you can paint the walls a bolder color to help them compete with the molding, you should. Also, some large, bold art pieces should help balance things with the molding and draw the eye away. If you can, put a couple of other tall vertical elements in other parts of the room that will also break the line of the moulding, such as a tall book case, lamp, or piece of artwork.

don't paint the molding! that room has great character and many ways to arrange the furniture. you can make the windows a focal point with separate wood curtain rods and velvet drapes in a jewel tone or more like one wall with separate light rods and curtains in the tone of your wall colour. in both cases, hand the rods close but not touching the crown moulding, maybe 1-1.5" below, and the curtains should go to the floor to minimize choppiness. no one really will notice the peeps of picture rail or sill. if you need privacy, measure the inside with of each window (they will not be equal), times by 1.5 or 2, get lace or sheer panels of that width & hang inside with tension rods, along with the dramatic curtains, not instead.