After living with it for a year and a half, and nearly completing major renovations in the adjacent LR/DR and in the kitchen that this heart is in, we're leaning towards sheetrocking the wall, adding a mantle, and tiling the area inside the mantle.

There are lots of how-tos on the web if you plan to do this, but essentially you secure strapping to the brick wall, up to wherever you want the hearth facing to be, and sheetrock as usual. Observe code clearances for the firebox-to-combustibles measurement. Add a mantle (salvaged, store-bought, or custom made) and either leave the brick within it, or tile the brick.

Once you have a blank sheetrocked wall, you can even add built-ins if you want. Fastening securely into brick is a PITA (our house is brick, I know!) but do-able. Get a hammer drill and masonry bits and screws.

It'll look just like a normal wall and fireplace. Just make sure you're not wrecking something of valuable character that gives you home personality! That's my big concern with ours. If the off-center shelf and recessed arched niche were not there, I would leave ours as-is and simply add a cool thick salvage wood mantle slab over the fireplace... but the wall is big, dark, and crying out for some art, which can't be placed because of the brick protrusions.

and here are a whole bunch where the brick wall was faced in slate or other stone (any of these could have a slate or wood mantle installed, too):

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and of course if you just sheetrock the surrounding brick walls the sky's pretty much the limit and you can do a "normal" hearth in any style you like. I personally like this more modern one!

We did a lot of looking on google and flickr - do keyword searches and you'll get a lot of good ideas. Stacey really gave you a good summary of the options - plaster over it, tile over it and or add a surround. There are also prefab fireplace surrounds that you can install, do a google search for those. The general rule is that you have to have non-flammable materials for 12 inches around the fireplace...so no drywall or wood.

Since I was using tile on the floor, we decided against tile and had the guys (I am not a DIYer) plaster over the brick, and then we painted it. Then we added a whole walnut paneling thing that I love but is very taste-specific.

Oh - when we opened the wall we realized there were actually two fireplace stacks on that wall for some reason (gotta love old houses), so we decided to use the lefthand one and turn the righthand one into a cabinet for the TV components.

Here's the before:

And the after: