We are currently also facing the decision and are still uncertain. Pleated blinds are not a bad solution, but I can't quite come to terms with them. Additionally, we have cats, and I suspect that the things would be scratched within a few months.
At the moment, we are considering having the windows only partially frosted. So, for example, the lower half frosted, the upper half clear glass, or only one third frosted and two thirds clear glass. This way, you would at least have privacy in the most important areas while still being able to look outside. Completely frosting is out of the question for us; that would make me feel like I'm in a windowless room. I'd rather have clear glass completely and a pleated blind.