Turn a kid's closet into a reading nookor a cute little hidden bed. Like sleeping in a fort every night. Love this for a guest room, for the kids. you could make the bed a Murphy style, so it could still be a closet when needed.
This is a neat reading nook. I like the idea of curtains in place of doors, especially since this is a kids' room. Keep an eye out on them, but they feel like they still have privacy. This is a great idea for a playroom, too.