Windows With Blinds Inside Do Blinds/shades Have To Be Put On Headrails Or Inside Windows?

Do blinds/shades have to be put on headrails or inside windows? - windows with blinds inside

Recently I saw a picture of a home makeover and designer curtains over the windows in the wall tissue of the room give a feeling of length, or blankets in order to appear higher.
I liked the idea, but I do not know how.
Someone put blinds or curtains (I was leaning towards shades) on Windows, instead of Windows (indoor) or on the top bar of the window (set out)?
I loved to knit the shadows, but do not close my window, and I want to create an effect of room height.
Ideas? Suggestions?