There are two basic approaches to populating a dungeon. Some people like to adjust the dungeon to suit the players. This can be done in advance or on the fly as you are playing. This has the benefit of catering the encounters to match what the players can handle. Battles are more balanced and there are fewer player deaths. Treasure is in line with character levels and magical items can be handpicked by the DM to bolster any areas that are lacking in the party. This is particularly useful for groups who are relatively new or can't get together very often or if you are trying to hurry them along to higher levels.
The other approach is to fill the dungeon and let the players find what they find. I'm a strong believer in this sort of design. In real life, I don't expect a coffee house to be around the next corner just because I want a coffee. I look up where the nearest coffee house is and go there. Imo, players should do the same. Let them ask around town for information about the local dungeons to discover what's known to be in them. They can then decide what they can handle and make choices accordingly.
Otherwise players eventually realize that you are watching over them and start to feel invincible. They stay to fight the dragon instead of running because they figure that you wouldn't have thrown a dragon at them if you didn't think they could handle it. The real world doesn't work that way and neither should the fantasy world. I want my players to evaluate a situation and run if it looks too tough.
When I first started playing D&D, a number of us would take turns DMing and we all designed our dungeons the same way. We drew up a map of corridors with rooms jammed side by side throughout the whole place. Then we assigned a different group of monsters to each room. Characters would fight their way through, one room at a time, with occasional interruptions from wandering monsters. This was very entertaining at the time but utterly ludicrous.
Both noise and light have a far more limited range than you might think. If you get a chance, take some friends spelunking and test this out. It really is amazing to know that there is a friend a very short distance away with a very bright lantern whom you cannot see at all.
However, monsters in a nearby room 20 feet away, even if behind a heavy door, will hear the sounds of combat and come investigate. Warriors busting down a door will never take the monsters inside by surprise if the light from their lanterns is shining under the door and through the keyhole as they prepare to go in.
Beyond that, not all monsters are going to live harmoniously in close proximity to each other. In a dungeon as described above, there would be a great number of empty rooms with groups of monsters occupying different sections of the dungeon. Most likely, these would be positioned where each group could travel to and from the exit without having to pass each other's area.
There could be a situation where every room is filled with monsters. There could be creepy crawly insects and snakes permeating the entire level finding things to eat other than each other but still offering poisonous bites or constricting coils to unwary adventurers.
Or the whole place could be taken over by a large band of orcs or ogres. They could spread out into each of the rooms. When any one room or hallway patrol is encountered, the whole level could suddenly rush out to answer the alarm!
I think it is important that monsters be placed in such a way that it is logical that they are where they are and that there is a reasonable buffer between them and any nearby monsters that they would otherwise engage.
The levels of the monsters should be fairly similar to each other as well. Plus they should be fairly close in level to the creatures in the surrounding wilderness.
Traditionally, dungeons have multiple levels and the monsters are increasingly tougher as you progress through the dungeon. Unless these are undead or similarly stationary monsters, you have to account for how these monsters travel through the earlier levels to get in and out of the dungeon. If a 10th level monster deep in the dungeon has to walk by a room filled with 6th level monsters somewhere on the way out of the dungeon, why not just stop and munch on them?
Lastly, each monster should be native to the wilderness that the dungeon is located in. It doesn't make any sense for an Ice Worm born to the chilling wastes of northern latitudes to be in a dungeon located in a tropical setting.
In World of Warcraft and similar games we get used to collecting treasure from just about everything that we encounter. But if you define treasure as coins minted from precious metals you have to ask yourself why a given monster would have any in their possession. A wolf, for instance, has no way to pick up coins let alone means to carry them. And it would have no desire to do so if it could. Most monsters fall into this same group.
In most cases it is more realistic to imagine that a group of adventurers lost a battle in the middle of the wilderness. Their possessions would have fallen at that spot. The monster that killed them, or another that wandered by later, could have drug the bodies to its lair thus depositing treasure there at the same time. Other scavengers capable of manipulating coins (and having desire to do so) could have discovered the bodies and looted them. In this case, some treasure would be carried by them but most would probably be taken to their lair and hidden. Who would want to go hunting or scavenging weighted down by loot?
Following this reasoning, most wandering monsters would have no treasure at all. Most monsters would have at least incidental treasure in their lair. Powerful monsters may have a great deal of incidental treasure. Those monsters capable and desirous of accumulating treasure would have a much larger stash than other monsters of their level. And finally, there would be treasure merely laying around in the wilderness where the attacker didn't want it and no one who did had discovered it yet.
Other forms of treasure would follow similar rational. Keep in mind though that not all monsters would value each type of treasure in the same way. Most intelligent monsters should have a higher proportion of what they consider valuable opposed to what they may have accumulated as incidental treasure.
Many DMs when they start out run the encounter first and then roll up the treasure. It isn't until the encounter is over that they determine that the treasure included a powerful weapon or set of armor that one of the monsters could have been using. Don't let this happen to you. If there is an item that a monster could use and would know to use, be sure he is using it! It adds excitement as well when the characters see that one of the Ogres is wielding a flaming sword and realize that one of the party members will be wielding it soon if they win.
First off, there are Traps and there are Hazards. Traps are designed to be dangerous (if not deadly) and are inconspicuously placed to halt or impede access to what lies beyond. Hazards, all though dangerous, were not created out of malice and are usually obvious so they are easier to avoid.
Traps can be placed anywhere, regardless of what else is around and there is no reason that a trap should be restricted to the level of the area in which it is placed. The dungeon occupied by 2nd – 5th level creatures may originally have been built by a 20th level wizard with a devious flare for traps. He certainly wouldn't have placed low level traps to guard his home. He would have placed something far more deadly.
That being said, consider how your players will respond to these traps. If your players keep having their 2nd level characters decimated by traps that were designed for level 20 characters, they may get a little tired of playing in your world. If you do place particularly dangerous traps, find a way to let your players know that they need to be especially stealthy or maybe even that they should consider adventuring somewhere else.
One other thing to think about… How do the residents of the dungeon deal with these traps? If a trap is a one-shot deal in a populated dungeon, is it still sitting there ready to go off or has it already been sprung? Seeing a really nasty trap that has already gone off, and the remains of the poor guy who triggered it, might be a good way to warn your players that they should be on their toes now!
A well thought-out dungeon with well placed monsters and ample treasure can still become boring if it is just hack and slash in room after room. There needs to be some excitement in the air.
Every time your party approaches the room with the pool, they hear a tiny splash and see ripples on the water when they approach. But they can't see into the water and have no idea how deep it is and are all a little leery of finding at directly.
A room filled with ages of dust and debris also contains a tattered book describing how the owner hid his treasure in a secret compartment in his room knowing he was about to be betrayed. It doesn't, unfortunately, describe which room was his.
Or even something as seemingly irrelevant as a cold draft blowing through the main corridor of the dungeon every couple of hours.
There are lots of ways to add to the excitement of the adventure and pique the interest of players who are starting to get bored standing in the back of the party and watching the tanks have all the fun.
Make your dungeons fun. Think about why everything is where it is. Look at everything logically and see if it makes sense. Not all monsters should have treasure. Make it believable that monsters have what treasure they do have. Don't let a powerful magic item sit in a chest if a monster could be using it instead. Add some atmosphere to keep the excitement and interest up. Hack and slash is important but it shouldn't be everything. Have something for everyone to do: traps to find and remove, puzzles to solve, clues to decipher, and meaningless (or not-so-meaningless) events to keep your players involved.