Make a Canopy Bed from Curtain Hardware — IKEA Hackers
This curtain hardware from Ikea can be so helpful if you need to create a perimeter with curtains that may not be conducive to curtain rods. The hardware also comes in handy if you have to hang curtains around wall corners or if you're dealing with something like narrow angles like in or around a bay window.
Using a couple of "Command" hooks (the kind that you can remove; no nails) behind the side curtain panels and hang twinkle lights (20' strings, 2 of them). Because they are hung separately they will not interfere with closing the curtains.
Looking forward and thinking about being grandparents and building a house I'd like to have a couple kids' rooms using this type of bed nook. Kids love to look out the window and like the security of a more closed in sleeping space.