Go against the norm......I love doing that. Heck, I put laminate on my walls in the basement, so that I could get a libraryish feel.......
Take a look at my pics in the Project Showcase, and you can see what I did with my small window.
Cafe curtains I think would be fine. You can even bring them all the way down to the floor, and give the illusion that the window is bigger than it really is.
I have the same windows in my basement, and what I did was I put a sheer fabric panel, and I swagged it to one side and tied it, and I made them go right to the floor. In fact, I made them pool at the bottom.
You can even put panels on each side of the window, on the wall, giving illusion that the window is wider also. Just a thought.