The guys at RPGDot have posted their first developer diary for Sacred 2: Fallen Angel, in which level designer Nadim Affani talks about furnishing the game's buildings.
So, how exactly do you furnish a building? First I have a look at tons of images on the internet. For the desert city I browsed through hundreds of images from Morocco, for example. If you're looking for the right stuff to put on a table, there are dedicated blogs on the internet specializing in everything people use for decorating tables. When I then start editing buildings in the level editor, they are completely empty. No furniture, no objects. After several attempts I decided to start putting furniture into the houses first, and then move on to objects. That way, all houses already feature essential furniture such as beds, tables, chairs and shelves, when I start placing objects. I can also get an idea of how a certain room might look later on. Then I start working on one house after another and place items in such a way that each house's interior matches the overall look we want it to have. For example, the stables contain troughs, haystacks, pitchforks and lots more to make them really look like stables.