So I tried to take your suggestions into consideration - what do you think of this? I went into Adobe Illustrator using the colors that I did for the characters and used Illustrators 'color guide' to match the pink of the cat and the blue of the dog to complimentary colors.
From the original - I wasn't happy that the bed was one color...and the floor bothered me. Also I took Pete's suggestion of doing something out the window - I then went on a different layer and painted over it to make it look more abstract and window like.
What do you think?