We've been looking into options of dividing the space. Drapery is one, but do you have any idea how expensive a piece of fabric with four stitching is? It's quite a mystery actually, how much drapery can cost. The other option is to go with a company like the Sliding Door, but they are really pricey too.
We found this company, Loft Wall, today and we thought it might be a good option. They make portable dividers that you can customize the sizing and the panels. They are not cheap but they are not too expensive either. You can visit the web site to download the price list. Keep in mind that the published prices are retail, and no one pays retail!
Here are some samples:
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