Yes, His Majesty resides in the Istana Nurul Iman (Palace). There is a big Golden Dome under which the Sultan's whole Master Suite/Bedroom is. That Dome is the exact size of his private bedroom alone.
I can say the interior of the Palace is unimaginably majestic! I have personally been invited and have attended a couple of His Majesty's Birthday celebrations on both the morning award & title ceremonies and the evening dinners. Besides that, i have been lucky enough to attend a few of Prince Maleek's birthday parties because I used to go to the same school with him.
The Palace is Massive in size. If i'm not mistaken there is 3 or 4 floors of underground basement parking lots. and another 5 stories above this. His Majesty is really generous in inviting High-end officials and their children (above the age of 13) and also distant relatives of the Royal Bloodline (ie. Pengirans; these are the very distant relatives from great great great grandfathers which they share with the Sultan). So therefore these basement levels are reserved for official dignitaries vehicles (+police escourt vehicles) and other royalty vehicles. So we are assigned to park at the base of the Palace Hill and catch a coach that drives us up to the "Unofficial Entryways" (the back doors; this is far from the OFFICIAL Entryways but closer to the function area).
I remember once where the que's for the Coache's were so long we decided to just go and walk up the hill. Wrong decision, it actually took us 20minutes to walk up the hill. (It didn't seem that far when we rode on the Coache's)
I hope this gives you an idea of how big the Palace is. Hope its been much help to your curiousity