I read somewhere where curtains should be hung at the ceiling rather than just above the window trim. It gives the illusion of height — great for a small room or low ceiling.
In the my past home, I did hang my curtains at ceiling height for a dramatic affect rather than giving the illusion of height because in this case I had tall ceilings.
But, still this is good advice because I found this to be true with the wall picture hanging system installed in a small office/spare room. The system was flush at the ceiling with wires hanging down vertically for the pictures to hang on. I was nervous that this system would close the room in, but it did just the opposite. I was pleasantly surprised since this was such a small room.