This is just some thing I whipped up for AGS users so they can tell how to make rather nice room pics. They aren't the greatest, but they work.
In order to do this, you'll need a drawing program that blur, change the number of colours and has a majic wand or something equivalent.
A Majic Wand {from Image Folio (what i use)} is an area selecter that can select areas by color. EX: you have to select a area that is not the basic square, such as a circle. You use the majic wand (or whatever it is you have) and select the outside edge color of your color and it selects everything which inside your circle and a bit more. It's really confusing, but try different selectors in you drawing program and see which one does this.
STEP 1: Make the outline of the walls.
Make a basic room outline of the room you desire in any program you wish. I personaly use Paintbrush for the outline and then transfer it to Image Folio for the later because Image Folio has the "advanced" (more advanced than paintbrush) features you need to do this.
I'm glad they both run on my system or else The pics in my game would look like really horrible. oh yeah, they run on my system... barely (486... ugh...).
ANYWAY... enough of my whining
You should start with a wire frame so you know what everything is going to be. It should look kinda like this.


Step 2: Add the outline of furniture, signs, whatever you want to be on the background.
In this step all you do is add the furniture and whatever else you want to be in your room.

Step 3: Add color to your room and furniture or whatever else there is in your room.
*IF USING PAINTBRUSH TO MAKE ROOM, this is where you should transfer it into your more advanced drawing program (the one with the wand and 16bit colors). To tranfer it, you can either save it in Paintbrush and reopen it in the other program or simply Select All(CTRL-L)(in the edit bar at top), Copy(CTRL-C and Paste(CTRL-V) in the other program. Get the pic in the advanced program anyway you know how. If you did the outline in the advanced program, then you don't have to move it.
Make sure you have the pic set to 16bit color. I can't say how because it's different in each drawing program. Just select any color you want and fill in everything. Of course, you probably want to make the walls all the same color and the doors a different color. Just use the fill thing to do this.


Step 3 is just adding the "Base" colors for your walls and stuff.
Step 4: Now add VERY BASIC spots of paint.
In this step you use a paintcan (spraycan) or justthe normal paintbrush to put VERY BASIC spots of paint. You should do darker colors away from light sources and such. If you want a splatter of something, make it and off color (EX: if the wall is red, make the splotch yellow or green.) Just put general BASIC spots of paint.
***REMEMBER*** These spots won't be in the actual room, so don't be afraid to put a whole lot. Your gonna need them.

Step 5: Blurring with the majic wand.
I really hope you have a Majic Wand or something that does the equivilant to it.
What you need to do now is kind of comlicated. You select an area with the Wand and it finds the area's edges. It Should only let you do things to the area selected. So, Select the area you want to edit with the wand, then blur it. You should set the blur area to it's highest (mine is 100) and blur it until your are satisfied by the way it looks or you can no longer see individual pixels. It usuall take me five or six clicks with the blur area on its' highest.
Since you used the Wand and only selected a certain area, it shouldn't blur your edge lines. it should only blend the wall color with the spots of paint from Step 4.
It should look like this after you do it to only on area.
After you blend one part, just continue until you have blended the entire pic. I found that if you only blend the walls, and not the center of attention(doors, windows, things other than walls) ,it makes your eyes go to the clear things, not the walls. So, it's good for making people notice things they can interact with.
After blurring everything it should look like this.
Step 6: Change image to 256 colours.
Remeber how in AGS you can't import images that are more than 256 colours? (CHRIS YOU SHOULDN'T CHANGE IT!!!) Well, you now need to convert your image to 256 colours however you changed it before when you had to convert it to 16bit colours. I still can't say exactly how to do because every image maker thing is different.
After you do that you should be done with your image. some touch ups may be needed, but that's it.
This is Bubba signing off because it's late, I'm tired, and I need sleep. Hope you guys enjoy this and have fun!