Remove all the furniture from the room. This is necessary to help you place the rugs properly and create specific room groups. Store the furniture in a hall or in another room until you are ready to put it back.
Place rugs in the center of the new "rooms" to create a visual demarcation of space. For example, if you have a great room and want to separate it into a living room and a dining room, place one rug in the area that will be used for the dining room, and one in the area that will be used for the living room. These rugs should be large enough to cover most of the area that will be used for the designated purpose.
Bring the furniture back in and arrange it into room groups, either on top of or around the rugs you have placed on the floor. In a dining room, place the dining table at the center of the rug and arrange the chairs around it. For a living room, place a couch and chairs around the rug so that the rug is in the center of the living area.
Place dividing screens in between the spaces. This will further visually define the separate room groups. Use screens that match your decor; if you have contemporary decor, use a light maple wood screen that is either carved or covered in light-colored fabric. For Asian-inspired decor, use Shoji screens with black wood and rice paper.
Hang draperies with distinctly different colors or patterns in each area; pick fabrics from the same color group for visual cohesion.