A world building genre like fantasy and science fiction will often benefit from generally longer, more descriptive sentences (up to a few lines long), whereas more "down to Earth" genres like drama might benefit from less. That being said, it greatly depends on the expectations and style of the narrative being told.
You might write sentences no longer than 1-2 lines and still convey a great deal of information by simply separating them out. If we take your example:
I live, if it is not a misleading expression, in a town known as Mülheim to the outsiders. It is a world of its own, free from the logic of the known reality found on paper and within sane mens wiring. Fountains paint stars at night and drunk women become reborn virgins in the morning.
It's the same information but written in 3 sentences and perhaps more digestible to certain readers and writers. I prefer shorter sentences to the long, ongoing sentences myself but others may prefer the opposite.
An example of my preference goes as follows:
Rays of golden sunlight filtered through the translucent, dry surface of a leaf, held aloft by the hand of a small girl. With eyes focused on the veins of the leaf, she spun it in her fingers as she lay on the soft, green grass under the oak tree in the backyard.
These are two quite descriptive sentences, but two, not one. They are two different parts to the introductory paragraph, though both contribute to the setting up of the scene.
In this way, you give the reader a chance to reflect on what they've just read before moving onto the next part of the description (or in this case, the action).