use that application or algorithm that can take several pictures from different angles and construct a 3d layout. ("stereo reconstruction")
use this to automatically model a house / room.
use this model to simulate arbitrary paint coats with the ease of a click.
include light simulation - the program must know what kind of lighting you have

have user enter any number of photos he wants. accept all conceivable image formats.
reconstruct as one big 3d model of the whole area
pics may introduce separate 3d spaces with no connection. present them as distinct rooms.
let user navigate through a room in 3d. use something like photoshop's magic lasso.

to know best tolerances for magic lasso:
 go on the web and pick 120 pictures of the insides of houses. lasso them.
or maybe don't need to do that? if we know shape then the lasso just ends where the wall isn't flat anymore.
but there could be things hanging on it like pictures.
between colors and shape, the program should be able to detect walls automatically. let the user intervene if he wants with tools like magic lasso.
now just pick colors and apply them. use ideas from my color picking program.
mode to apply color to whole room and mode to apply it per wall.
lighting, choose between: fluorescent, incandescente, neobdynium, led, ambient sunlight, sunlight (might be an outside wall), maybe some commercial-grade light sources because stores and malls might want to use this.
try to detect light sources in the pics. also let the user input light sources while navigating the 3d.
try to identify light source as well based on shape.
can take image as evidence of brightness of light source, but won't work right if the user used a flash.