Partitions
If you want to add ceiling paper and wallpaper correctly, you will have to install the first and second floor partitions now. These partitions can be placed to create any interior space you want but I installed them as the dollhouse photos show.
The most important thing you have to keep in mind, regardless of where you place the partitions, is keeping them straight and level. I suggest you measure in order to keep the partitions spaced equally from the back of the room to the front, both along the ceiling and floor. You do not want tilted partitions.
Also glue the partitions to the front wall of the dollhouse and the ceiling. Do not place glue along the floor, as this you can damage the finish.
Now that the partitions are in, I am going to stop assembly for the time being and focus on some finishes.
Painting
I painted the exterior walls. I gave the dollhouse one coat of paint and let it dry before "sanding" the walls by rubbing them down with a brown paper bag. Just crumple up your bag, so it gets into all of the nooks and crannies of your dollhouse. This is the only way you should sand pre-milled siding. If you use sandpaper, you will damage the siding details. The brown paper bag will smooth your walls without causing damage.
Afterwards, I gave the dollhouse a second coat of paint.
Porch Floor
I went ahead and installed the porch floor, over the foundation. Make sure that it is flush with the side walls. Because the porch floor is not holding up any structural component, you do not need to use nails.