Improving sound in the room

I am in the processing of performing some room remodeling and in association with this am converting what used to be our breakfast room into an home theatre room. The room measures 12' X 18' (+/- a couple inches). It presently has ceramic tiles, but is being refloored in hardwood (tomorrow - no changing this). There are quite a few windows (totalling about 50% of 3 of the 4 walls). On the fourth wall there is a larger passage way (no door) going into the area between the family room and kitchen. This fourth wall is also a solid wood wall (similar to tongue and groove flooring). Ceiling is angled from 7' 6" angling up to about 13'.

Equipment: 50" plasma on east wall, facing west. Speakers are all B&W (including a 600 subwoofer, didn't want to go too strong on the sub due to room characteristics).

I am looking for advise on what I can do to dampen the sound waves while still appearing acceptable (to my wife). We just ordered a small sectional (clothe vs. leather) and will use an area rug between the front speakers and the seating area.

Question: has anybody ever made clothe panels with intersting fabrics that were framed with egg trays installed behind them for sound dampening (or something similar to this)? Black panels and exposed foam is definately NOT acceptable.

Any suggestions or experiences with this? I am not willing to tear down the walls and put up specialty walls.

Thanks truly for your knowledgeable feedback.

Chris Koffend