Buy, or make, curtains that are specifically meant for bay windows. Because of the angles involved, they must fit a little differently than traditional window treatments.
Hang the window treatments at the top of the windows, below the transom. Leave the transom exposed for individual decorations.
Create custom curtains to decorate the transform above a bay window. Use lighter, sheer materials, such as lace or custom beadwork, to allow the sunshine to come through.
Use glass paint to create custom designs on the glass to match the rest of your decor. Craft stores sell complete kits with stencils, leading and any other supplies that you need to mimic stained glass.
Hang sun-catchers, prisms or other light-catching window decorations in the transom above a bay window. Anything that reflects sunlight creates rainbow images around the room and will blend into any color scheme, while adding visual interest. Change the decorations according to the season.
Hang small plants in front of the transom glass. Spider plants and other varieties that cascade add interest and life to the space.