The design I have in mind is generally this with more features in place of the gaping space you see right now. Popup boxes to feature: status, inventory, quests, equipment will go here. This will be similar to the setup of most JRPGS. Originally I planned on leaving the entire screen open and have key-based menus, but in order to incorporate a chat element I felt it should fit this way.
Any feedback or suggestions will be welcome, but try not to be too judgmental until I have a working interface to display. The same goes for my shoddy pixel art, I'm sure with some clothes mr. base would be a little more photogenic.
-GreenMonkey