Is one permitted to sleep in a room/house where there are idolatrous images on the walls, such as JC, virgin Mary, etc. (which are being worshipped – the inhabitants pray to them)?
Before getting into the technical halachic aspect if it is permitted or not, it is surely not advisable to stay there when you are prone to looking at idolatrous images on a constant basis. These things can have an effect on us, and therefore it is best to try to correct the situation or find somewhere else to sleep. Having said that, it is not halachically forbidden to sleep in the room, however you should preferably not daven in that room, and if you have no choice at least it should not be facing the avod zara. Additionally you should be careful not to bend down to pick something up in front of it, as it will look like you are bowing down to it.
Shulchan Aruch O:CH 94-8, M:B 29-30, Chayei Adom 23-5.