Thanks for your responce MadMark. I don't have posts yet, that is my hangup. The frame of the bed has angle iron on three sides. The side angle irons do not reach to the foot of the bed where the foot posts will be. I am thinking of extending angle iron to reach the foot of the bed then bolting on the posts. I think that a wood post made by ripping 2x4 in half would work out ok. I have also been considering PVC pipe(not exactly furniture quality) or plastic fence posts (they seem so massive - 4x4). You are right, the top could be suspended but this bed gets moved around the room quite frequently so I am exploring using aluminum rods from the front to back posts with cross pieces also from aluminum. I think that for stability of the posts I will need to made a headboard and footboard but the way to attach them to the posts has me stumped sice I don't know how to joint them other then overlaping the pieces. Well, there you have my plans - still in the making.
Ok, you have a basic metal bed frame. If you want a canopy and aren't satisfied with the rectangle hanging from the ceiling idea you're going to have to build a full bed frame. However this is NOT a particularly difficult task.
Rockler sells all sorts of bed frame components for making modular bedposts. They all interlock and you can mix & match and combine them in original ways to make most anything you can conceive. Basically you'll TOSS your existing metal bed frame and then make a headboard and a foot board. The side boards are just straight boards with an inside lip to hold the slats. You buy screw on connectors for the corners and you're done. The headboard and foot boards can be as simple as a piece of furniture grade plywood with a simple cap molding on it or as elaborate as you can dream (I would think that if you're going for a canopy you'ld want something more than just a flat piece of plywood). Anyway this is a very "doable" project.
Order a Rockler catalog off my web page and I'll make 50¢.
Look up their part #38840 and it'll key into the related parts.