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If i wanted to make an island and create houses on it what programs would i use to do this? i know how to use world forge but i cant use it place buildings.

You can create your Island by drawing it on a .bmp image that you would in return use Dragon to create your Map0.mul file and statics0 / staidx0.mul files.
After you are satisfied with your land, you would then create your buildings IN GAME item by item. Not with some mul editing program.

I suggest if your questions go so far back as to how to even make a map, You should indulge yourself with a bit more reading of this site. You will find 99% of most any map making question and more here. I can nearly garuntee most any question you have, has been answered here many times over.

You can start searching Here

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