Many ladies posted suggestions on the Beautiful Womanhood message board. The general vote is for muslin curtains slightly embellished. I thought of this myself, and I also thought of inside shutters that simply sit on the window sill.
Today, I went over to my soon to be new house and checked out the bathroom more closely. The window doesn't have a sill (I'm not going to mount shutters) and the bathroom really is quite narrow and small, therefore I don't want clutter. Curtains sometimes make a room look smaller and more cluttered to me, so I think I'm going to settle for white shades for now and maybe and embellished muslin valance.
Oh, how small that bathroom is!