We had the crown molding continue over the sink/window, put a little arch between the cabinets, and added a light. It looks nice.

This is a lot busier than ours, but same principle:

http://www.houzz.com/photos/3114021/Summit-Hill-Shingle-Style-Home-Remodel-victorian-kitchen-minneapolis

Roman shade that's hung a bit higher and wider than the window.

I think cookbooks or a shelf would look too cluttered.

I have grass shades that are outside mounted so they are above the top of my windows. Something like this
http://www.houzz.com/photos/1294604/Outside-Mount-Bamboo-Shade-traditional-kitchen-los-angeles

We have the same thing. Our crown molding goes around the top of the space and there is nothing between the top of the window and the crown molding. Honestly, putting anything in that small space (other than a window treatment) will just look busy.

OP here. It is one single window and one double window, if that changes anything.

We do d a Roman shade, but I'm not sure if you have a similar type setup.

http://greenstreetblog.blogspot.com/2011/01/before-and-after-kitchen-flat-roman.html?m=1

I'd put a shelf to store cookbooks.

It's a great place for an artful wall clock.

Our cabinets go to the ceiling, but our windows do not. There is approximately a foot between the top of the windows and the ceiling. This area looks naked and awkward to me. What should we put there? Should we install backsplash around and above the windows? Shelving? Artwork or metal scrollwork?