For us, we had our 2nd child when we were still in a 2 bdrm apartment, so the crib had already been set up in the toddlers room. The baby didn't sleep there for the first few months though during the night as I had a cradle next to my bed.
With our 3rd child, by that time we were in a 3 bdrm house, and the kids had their own rooms.
The oldest knew since she had the larger room, she'd be sharing with the baby. Again, we used the cradle for the first few months. After that, when he was in the crib, if he woke up at night to nurse, sometimes she would wake up, pick him up & bring him to me, other times I woke up & went & got him & she'd still be sleeping. It just depended on how tired she was. LOL
Eventually, we had the kids switch rooms (as there were now 2 boys & they needed the bigger room.)
This "mix-up" of rooms, furniture, toys, etc seemed to make everything easier on everyone. (It was a lot of work, but both older kids were excited by it.)
I'd say, set up the crib/bed in the room & let the other child know that pretty soon, they'll be sharing. Help the older one figure out things to have as "theirs", like this dresser is only for your stuff... this side of the closest is for your clothes... setting up boundries helps.
Also, asking them to help keep small items that babies might eat up off the floor is good too. It makes them feel useful & important.
Have fun! :)