This paper describes a participatory design-oriented study of an ambient assisted living system for monitoring the daily activities of elderly residents. The work presented addresses these questions 1) What daily activities the elderly participants like to be monitored, 2) With whom they would want to share this monitored data and 3) How a monitoring system for the elderly should be designed. For this purpose, this paper discusses the study results and participatory design techniques used to exemplify and understand desired ambient-assisted living scenarios and information sharing needs. Particularly, an interactive dollhouse is presented as a method for including the elderly in the design and requirements gathering process for residential monitoring. The study results indicate the importance of exemplifying ambient-assisted living scenarios to involve the elderly and so to increase acceptance and utility of such systems. The preliminary studies presented show that the participants were willing to have most of their daily activities monitored. However, they mostly wanted to keep control over their own data and share this information with medical specialists and particularly not with their fellow elderly neighbours.