Add 2". Measure the width of your sheet. Cut this out and make a shirt tail hem along one short side. Stitch these widths together with rights sides facing each other. Place on the bed.
This may mean you need to cut your widths at different points across the sheet. Ideally, you would make a full 3" hem (add 4" extra inches to your length measurement above if you do this hem), but for simplicity just make a simple shirt-tail hem at the bottom by marking 1" off the bottom. Make a shirt-tail hem rolling 1" from the edge in half and then sewing down near the fold. For extra pizzazz, use piping, trims, or beads in the seam.
Again, you'll want right sides of the fabric together as you sew. Decide the height of the valance. That means that two panels together will also be 50-100% of your window width. If you have wide window or you wish to have the swag fall further down the side of the window, you'll need to do a bit more work, but it's still fairly easy.
Of this folded over fabric, turn 1" under. A designer look at Walmart prices. 15" -18" is standard so make the height that you cut from the sheet 40" - 44". For length make it the height of the window plus 10-12 inches. Center the fabric over the interfacing and iron according to the directions. Then measure down 3-1/2" and mark with pins. If you want a small ruffle above the valance add 2" - 4" to the total above. Curtains Swags are the easiest to make.
Use them to Nomex fabric Suppliers, drapes, dust ruffles, round table covers and more. Then turn half of this under. Hang your shade on the shade hardware. You're done. Turn under the ends on both side and iron down with Stitch Witchery(r). Put your panels on the rod. Yep, the same sheets you cuddle under at night can turn a bedroom from boring to stunning. Measure the length you want the panel to hang. Panels are done much the same way.