I decided that I wanted to buy ready-made rack, but I was not willing to pay very much. After searching eBay and various online retailers I decided to buy an 8-sword wall display for $29.99 (plus shipping for a total of about $40.00) from KultofAthena.com. I decided to buy from Kult of Athena for several reasons; their prices matched those found on eBay for similar products, they have a reputation for great customer service, and they accept PayPal.
8-sword wall display from KoA:


The rack is quite nice for the price. The catch is that it is made for Japanese-style swords, and is therefor too narrow for more hilt-heavy European swords (it measures 13 3/4'' wide x 40'' tall). This was easy to remedy since the rack is held together with dowels. After a short trip to my local home improvement store, I was ready to begin modifying my sword rack.
Tools and supplies:


I cut the dowels so that they were twice the length of the previous dowels. Unfortunately, this means that I need to go back to the store for one more dowel, but at abut $1.50 each, it's not a big deal. Here is the result of my efforts so far:

In addition to adding the third dowel, I will also be painting the dowels. I will use leftover wall paint, so when I am finished the dowels will match the color of the wall in the bedroom (which is also a burgundy color, although not quite as dark). I will update this thread once this rack is complete. So far I am quite pleased with what I have done. The total cost for the project will end up at about $45.
Please feel free to comment or make suggestions, or to post your own sword display/storage projects.
All the best,
Jonathan