Well in tribal areas they were simple floor coverings; the leather side it tough enough to stay in tact while rubbing on the floor and the fur is warm. They were basically a statement of awesomeness/strength, if you killed a lion or zebra (or could afford to have one killed by your staff) and put the skin on the floor instead of into clothing, then you were clearly badass. With regard to sheepskins and the like, I would wager that it was just an early form of carpet; houses made from mud and straw tend to get cold. Now days they are purely decorative.