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Do you remember Toy Story, and the utter creepiness of the mutilated toys? For some reason, we are most disturbed by that paraphernalia which denotes the death of a child... or the death of childhood. For this room, the decor is that of a damaged playroom. Thrift shops or antique stores are the best source for this; if one were to provide mostly dolls that looked as though they were from the last century, this scenario would go very well with a Victorian-style haunted house.
The dolls must be damaged in disturbing ways. Look to the art of Dave McKean (or the interior art of Oingo Boingo's CD Boingo) for examples of how to go about this. One might, for example, remove the eyes of all of the dolls; this has always seemed to many people (including me) to be unutterably creepy. Or one might disassemble the dolls in a manner resembling vivisection. One could make an especially creepy jack-in-the-box by employing a Punch doll, a box, and a spring.
All of the dolls should be distressed and aged; a coating of dust (or whole-wheat flour) will also work well. You can arrange them on equally dusty furniture... or hang them from the ceiling in some ritual manner. If you have a dollhouse to use, arrange the dolls within for some gruesome scene, using fake blood only if you are sure it will not stain.