We did this all the time in design school. In the old days, we'd pour through catalogs and magazines, carefully using Xacto knives to cut out photos of furniture and accessories, and glue them down to foam core boards with actual fabric samples, paint chips, and wood finishes.
These days, it's way easier to do it all digitally. You can hunt around online for limitless options for furnishings and materials, copy and paste the photo and resize and crop as needed.
I use Powerpoint to do all of mine. It's what we used when I worked at the Giant Cabinet Conglomerate for our photography sets, and it's what I continue to use now for my personal life.
So far, I only have three rooms finished for our (someday) new house: the kitchen, dining, and living rooms. I started with these because they are all in the same area, all open to each other, so I wanted to make sure I had consistent themes throughout.
These three rooms have several common elements:
1. Wood planks and beams on the ceiling. I want to paint them all white, to give the whole area a county cottagey vibe. Tongue-and-groove planks are easy to install with construction adhesive and a nail gun, and the beams are just 2x4s installed on top.
2. Dark-stained hardwood flooring. I'd really like to have wide planks, with some knotty texture (like oak) that will show through the espresso or walnut colored stain. I also want high-shine on them, so that they will reflect natural light, visually expanding the floorspace. The dark finish will also help to create the illusion of depth, since dark colors recede visually and contribute to the open feeling I'm going for.
3. Jute rugs. Rugs help to define areas, create a cozy spot for furniture to sit and gather on, and add visual texture. This is a big way to bring natural elements into your home. The photo I used is from Ballard Designs, who has a really wide variety of sizes at good prices.
4. Rustic metal. In addition to the wood floors and jute rugs, I plan to use a lot of weathered, aged metal through accessories. A good example is my old milk crates. I also like the look of galvanized steel, like on these chairs from Crate and Barrel. The help to lend the rustic vibe I'm going for, and will hold up for a really long time. The leather couch is the Austin Leather Sofa from Pottery Barn, and I really like the way the dark color of the leather will contrast with the jute rug it will sit on, then echo the dark hardwood floor underneath. This is a basic principle of design called repetition - repeating a similar color, texture or shape contributes to overall harmony in a room.
Don't be afraid to mix finishes in metals, too. I always used to be so matchy-matchy and thought that all of the metal finishes have to be the same. Not true! I love a lot of different finishes, and you'll notice that I have brushed nickel in the kitchen (pendant lighting, pulls and faucet), rusty metal (milk crates, wire baskets and base of the coffee table), and black iron (in the light fixture for the foyer and the chandelier for the dining room).
I can't wait to post the rest of the rooms once I've got them all done. Earlier this year, we purchased a bed and two dressers from Ikea, so I need to work those into the master bedroom board, and work with our existing couch for the finished basement. Lord knows I'd love to go out and buy all brand new things, but that's just not the way life works, folks. Creative interior design comes from using what you already have and with the budget you have, no matter how restrictive it is!