A mysteriously signed "Ms. L" writes in about her basement windows:
Dear AT, We've got these small and deep basement windows! How should I cover these? Privacy is an issue. The ledges are often used - and there will be furniture underneath.
Anyone have similar styled windows like these and find a decor-friendly way to cover them up. We're thinking window film or small roller shades might be the best way to go, for both ease and budget. Just don't buy the cheap-o rollershades from KMart like we chanced...they're not worth it and don't work as well as our custom shades we ordered online.

Sheex Bedding
Window film--simple and easy!
roman shades
second window film.
These "how to cover window quizzes" always seem really easy.
Do both!
Not just any window film... Emma Jeffs window films.
http://www.puremodern.com/Window-Film-Moroccan-Tile
Clean. Modern. It'll add some pattern and texture to the space.
Unless you need a clear view of the outside world (surveillance can be important for those who don't have a baseball bat under the bed and an elaborate security system)(that was meant as sarcasm; don't you start in on me), I'd agree with the window film recommendation. Simple! Neat! Cheap! Etc.!
I say window film too. I have that stuff on just about all my windows in the front of my home up to a little eye level. The backyard is fenced in by sand-blasted glass panels as well. You could say I'm a fan of frosted glass. Lets the light in and the wandering eyes out!
I used to live in a home with those window wells. Back then I covered the wells with metal grates and put potted plants on top to keep the neighborhood cats out. It also made it feel more private in the basement.
I spent alot of money recently to have my home styled. The decorator, said "do not cover basement windows" they are a huge asset. People pay thousands to get light into a dark basement. What you can do is buy for $30 at Home Depot "Mirrored Window film" this allows you to see out during the day and get sun, and nobody can see in. At night with lights on they become ineffective and would need a cover for the window. Ever see those black out motel windows, that is how they do it. Or you can buy on ebay as long as the film is a 20% grade, but Beware you need to cover at night or everybody can see in!!!
I second roman shades. You could always use window film as well, but for decor, the roman shades would be more attractive and finished looking. (I saw some premade ones at Lowes and at Big Lots, if you happen to find the right size and color there.)
What are you using the ledges for? If they are sometimes used, maybe you haven't come up with a better way to deal with that problem. Seems like from a design standpoint they should not be used and you should go something substantial on the window. If you do shades make them bigger than the windows!
If the room is big enough you should not butt furniture against the wall, and I would go with drapes and a bamboo shade. Ie if it's a sofa that will go there, it can be out 6 inches or so to allow for this. Drapes will soften your rooms acoustics and I think make it feel less like a basement
Find some old episodes of Divine Design where Candice does a basement. She always makes teensy basement windows look grand and glamorous. She has pictures of back episodes on her website.
I agree with Donald, do both film (for privacy) and roller shades inside the frame (to block light). The moldings are nice, there is no need to cover them up.
Venetian blinds (natural or white) inside the frame and Window film for privacy when the blinds are up. Ikea has for exampel "LINDMON" in different colors and sizes.
http://www.ikea.com/us/en/catalog/products/10092570
Delikatissen
I second Robyn - Go for the full-length drapes and sheers to make these awkward little windows appear to be big glamourous french doors...
...and put your tchochkies elsewhere.
Re: Window film, and "Beware you need to cover at night or everybody can see in!!!"
Um, wasn't that the problem originally posted?
Inside mount solar roller shades.
And try to refrain from using the sills for anything.
One of Candace's basement window tricks is to mirror the wall below the window, then run blinds or sheers floor to ceiling as if the windows did the same.