behold, an ugly fireplace (HELP!)

Our fireplace has been a trial to me since we saw the house in it's original un-splendor. It's just in a weird place, and is the strangest design I have ever seen. We have the bricks primed, and we know that we want to eventually paint it a different color, and line the hearth and possibly the unpainted inside edges with ceramic tile. However, there is not enough hearth for spark safety, and we're not sure how far to build out the hearth area on either side and the front. We don't want to go too far for toe safety purposes, and we definitely don't want a funny looking fireplace. (well, any more funny looking than it already is, anyway)

This is something we have to do before we can lay the laminate flooring, so we need some un-biased opinions here! Can you help us? Check out the photos below - you can kind of get an idea of how it's set up. Tell us how far you think we should build out the hearth on the sides & front. For more frame of reference to location, etc., click here and look for the fireplace.












We are planning to sell this house in about 5 years, so we want to know what the majority rule is for a couple of items. The fireplace is one. The SECOND item is this - do you prefer hard floors throughout or carpet for the bedrooms and hard floors in the rest of the house?

PLEASE leave your comments, opinions, and ideas!!