Go for it. I agree, the white is not good. The space between the tiles (?) and the mantel is also awkward. I would treat this as one space with the tile and paint the whole fireplace surround area one dark color, then paint the wall your rusty shade. Sort of trick the eye into seeing it as one continuous tile facade with mantel. The whole thing would look better without that particular mantel, so if removal is an option I'd do that. Let it be more simple and sleek.

How porous is the faux stone? A couple of coats of Minwax Gel stain may be a solution.

I don't know how artistic you are but a mosaic might be a good option. The design doesn't have to be very complex but it is a good way to bring in some color and character. It can be very folksy or very clean looking. You can even just use a tiny colored subway mosaic.

^subway tile mosaic. :-)

Honestly, if you are too strapped for cash to do anything major, I'd just get some objects on the mantle stat and see how much the area changes. A milk glass collection, some pretty white frames in the blue section, maybe some jade plants in vases coming out from the wall... Could make all the difference.

Oh, mine's made of the same stuff and is far uglier--think columns up the side. I'd like to remove it, but I don't think I could without tearing up the wall entirely.

I'd love to see what you do with this.

I'd do a Venetian Plaster.

tear off the stone and the mantle, and panel that wall in reclaimed wood. cheap and beautiful.

paint away....if you hate it painted, then that'll just speed up removing and replacing it

either way, you'll be happier than you are now

i think the main problem w/ this fireplace is the disconnect b/w the bottom, the mantel, and the awkwardly sized niche. i can almost guarantee this was "designed" (barely) by a builder. augh! this is where a designer would have come in handy.

you really should add some sort of wood & molding up the sides to connect the actual fireplace to the mantel. i would NOT paint any color but white (same color as mantel) b/w the base and the mantel. i think it will just make the mantel look even more floating, disconnected, and weird.

i just sketched up a new fireplace surround for a client of mine.... check it out, might help...
http://hishouseherhelp.wordpress.com/2010/01/21/heathers-renovation-new-fireplace/

Actually I don't think it's the shelf that's your problem, I think it's the fact that it seems unrelated to the rest of the fireplace. I think the simplest thing to do would be to paint the front of the chimney breast, from the offending shelf down, all white. That way the shelf, the white surround and the space in between will all look like they belong together. Then you can paint the rest of the chimney breast whatever colour you like.

I kind of like the post & lintel effect right around the firebox. I don't like the mantel at all. Without it I think the whole thing would look much better, especially if painted in darker colors without a lot of contrast between the trim and the surrounding wall. The mantel looks like an afterthought.

I'd do away with the bulky, over-sized shelf and the quaint, tiny niche entirely. I'd wallpaper the niche and over, then paint it and the surrounding area a dark color, possibly black. Then I'd put up a much cleaner, less bulky shelf or several shelves above that. That being said, because of the odd angles around the fireplace, I'd suggest a nice log rack and a really eye-catching, angular chair that will divert attention away from the squatness of that fireplace. With that much powder-blue, pastel, weird-angled spectacularness going on in there now, definitely consider really dark colors instead of anything quaint or quirky.

Take down that poor undersized mantle shelf. If you want a mantle, put one back up that is long enough to reach the edges of the wall. (Take care not to violate the fire code or the fire box manufacturer's instructions for the depth and clear vertical space of the new mantle if you go that route.) Fill in the horrid niche while you're at it.

If even that much is beyond what you can do now, just paint the whole thing the same color. You could try leaving the (probably acrylic stucco) trim around the firebox white at first, and if it looks ok, then don't paint it, but if it's still hideous, then go ahead and paint that too.

Take a look at this pic from one of today's posts:

http://s3.amazonaws.com/atimg/1082052/u-st-2_rect540.jpg

A fireplace painted rusty orange: http://s3.amazonaws.com/atimg/1082052/u-st-2_rect540.jpg

I think the cheapest & simplest thing to do (as a temporary fix until you can afford to replace the tile/mantle with something nice) would be to paint it all white so the tile/ weird and too short mantle don't stick out so much, and then hang a big mirror with an espresso frame over that fugly niche. Then add a tall vase with some branches on one side maybe, and/or put a chair on the other side, to draw attention away.

But I do really like the idea of king924 suggested about the modern-looking orange fireplace. Can you afford to just have the tile and mantle removed and the wall refinished?

I had a hideous fireplace like this and I think I painted all of it a blue color.