Upholstered headboards are quite in vogue and can be easily made at home. Real Simple has a great post on how to make a headboard and check it out here.
From Real Simple:
# 1 standard 3/4-quarter-inch-thick sheet of plywood cut 44 inches high and to the width of your bed (39 inches for a twin; 54 for a double; 60 for a queen; 76 for a king)
# 1 one-by-four cut into 2 pieces that are 12 inches longer than the distance from your floor to the top of the mattress
# 1 54-inch-wide piece of fabric cut at least 12 inches longer than the width of your bed
# 1 2-inch-thick piece of foam cut to the dimensions of your headboard (can be purchased from www.foamorder.com)
# 1 roll of cotton batting (90 by 108 inches; www.joann.com)
# 1 can of 3M Spray Mount
# 4 1 1/4-inch wood screws
1. Cover one side of the plywood with spray mount then attach the foam.
2. Wrap with a layer of cotton batting to smooth out any sharp edges and the corners. Attach with a staple gun.
3. With a staple gun, attach the fabric along one end of the headboard and then the opposite side, remembering to pull the fabric taut. Then attach the other two sides.
4. Turn the headboard over and place the one-by-fours 12 inches from the sides, making sure that the top of the one-by-four is 12 inches from the bottom of the headboard. Screw the one-by-fours to the headboard. Place the headboard against the wall and push in the bed.