If we are going to accomplish a great looking window treatment there has to be an order to how we proceed. The place to start is visualizing the impact the curtains will have on the rest of your decor. You have nothing to measure until you know how the treatment is going to look.
Perhaps you are picturing a full length pair of panels? Maybe you will want a valance over the top. Have you considered having tied back panels over panels. How about a Valance with a Tier or Cafe in the lower portion of the window? Perhaps a valance outside of the window and a cafe in the window or a cafe/tier outside the lower part of the window that extends all the way to the floor. You may want the curtains installed inside the window jams on a tension rod or outside of the window. The best way I know to help you visualize these choices would be to cut pieces of newspaper to the size of the various options and tape them up in the window. Try several combinations until you are pleased with the result.
If you have decided to place a valance or a full length panel outside the window, the rod is usually mounted 2 to 4 inches to each side of the molding. That way the molding is completely hidden behind the window treatment. The rod generally is placed 4 inches above the molding.
If you have decided to mount the valance or cafe inside the window frame on a tension rod you can make the valance or cafe length any amount you wish because the window treatment can be moved up or down at will. As a rul of thumb the valance should be no more than 1/4 of the window length and the cafe should be just above the halfway point of the window.
Now you can start to measure the actual curtain. Measuring the length of a full panel outside of the window then becomes the height from either the top of the rod or the top of the rod plus any ruffle down to at least where the sewing line on the bottom hem is the same as the bottom of the sill or lower. If the panel or cafe is inside the window frame you should allow for 1/2 inch clearance up from the window sill.
Here are some additional window designs you may want to consider. There are so many combinations that you can choose from.
These, of course, are very general suggestions and are meant only as a guide. Through all of this you should remember the one cardinal rule, which is that "beauty is in the eye of the beholder". If any other method of installing a window treatment pleases you then, in my opinion, it is good decorating.
Good luck with your project.
Al Nelson will be happy to answer any and all questions you may have about lace curtain design when you visit his web site http://www.oldeworldelace.com
The author brings to this article 30 years of experience in the interior design field including custom window decorating design, fabrication and installation. His specialties involve all types of window décor as in custom made draperies, ready made lace curtains and macrame ring lace as well as blinds and shades. His designs have been used in a variety of settings in many beautiful homes throughout Southern California.