For the home improvements, I like the idea of racks and such. I think making too much stuff movable will cause problems though. Perhaps have a merchant sell just movable furniture and leave the rest of the furniture in the game stationary. And with the racks, you could keep then in a secret room behind the bookcase like you see in secret agent or hit-man movies. <img src="/ubbthreads/images/graemlins/delight.gif" alt="" />
On storage, I stored everything in two chests. Stuff worth keeping and stuff to be sold. The stuff worth keeping chest was very well laid out. The stuf to be sold chest had everything overlapping, but neatly. I found that if you place things starting in the lower right corner of the chest, they can overlap. I had a stack of armour, a stack of boots, stacks of gloves, amulets, rings, kite shields, round shields, leggings, lock picks, helmets, long weapons, axes, daggers, vertical weapons, horizontal weapons (just the way they're presented), bows, crossbows, and I'm sure there were more. It turned out very neat, and when it came time to sell stuff, I just clicked repeatedly on a stack to pick it up and sold it until Geoff had no more money. Easy!