Step 3: Cloth simulation
In the shape keys panel, set the value at zero, move the mouse cursor to it and click 'I' ( Blender will add a keyframe), jump to frame 100, move value slide to 1 and add another keyframe. In the physics tab click on cloth, select denim, enable pinning and select 'pinned' vertex. Enable a self collision flag at level 2. Now it's time to save. Turn on disk cache, click on bake all dynamics and wait (coffee time).
At the end of the simulation click Alt+A to see the animation. We could make a more interesting animation moving the floor plane up along the z axis, so our curtain would be more realistic. Select the plane under the curtain and set as collision in the physics tab. Jump to the first frame, move the mouse cursor into 3D viewport and add a location keyframe ( I > location). Now, select the 50th frame, move just a little bit of the plane along the z axis and add the second location keyframe. Re-bake the simulation (time for another coffee). At the end of the simulation, delete the key1 shape and click on apply as shape key in the object modifiers tab. If you want to change something or add wrinkles in the curtain use sculpt mode.
Step 4: Window generator 2
First of all, enable add-on (file > user preferences > add-ons > window generator 2). It's very simple to use: click add > windows. The main options are: number of windows panel, type of top (flat, arc, triangle), thickness of frame, type of materials and, of course, size of each window. The add-on creates and assigns material to each part of the windows – it's a great help and we can save a lot of time.
Step 5: Modeling the room
Delete the plane under the curtain and start to model the room. Add walls, a top plane and floor. If you don't want to model all the objects of the scene, there are a lot of free models on the blendswap website
(pillows, plants, furniture etc). Use some pictures on the walls and add just a little bit of imperfection to your scene, in this way it will be more realistic.
Step 6: Lighting setup
Change the render engine to cycles, add 2 emission planes inside the room; one in front of the curtain and the other to the side. Don't use pure white light – set the first one as warm light and the second as cold. Enable import image as a plane add-on and add a landscape picture outside of the window and set as emission (or use an HDR file as world surface).