and I think I'm losing! I had a commenter who asked about how we store the kids' toys in a small space. We live in a 2-bedroom apartment (I think it's under 1000 sq. ft.), and it's a constant struggle to keep the amount of stuff down to an acceptable level. Now, my acceptable level may be higher than yours, but I do what I can.
I think the biggest battle with living in a small space is keeping things from coming in. I'm pretty good at going through old/outgrown toys and clothes and sending them on their way. What is really hard is the constant stream of things that come in (the holidays are especially painful, although as the kids get older, their toys are getting smaller).
My kids share a room, and it's a decent sized space. They have bunkbeds, and their room has quite a large closet in it (which is used by all of us, because the two closets in our bedroom are split up so you can't hang anything long in them - the previous owner was a man, and I think forgot that half the world might want to hang a dress....).
this for the kids room from IKEA. I really like IKEA - I'm Swedish, so I'm amused by all the silly names on the furniture, and for something the kids are going to be banging on every day, the furniture is cheap enough that it won't break my heart if it doesn't last forever. This unit is big (almost 5' X 5'), and I got the square drawers for the bottom squares - they each have a row, and they are supposed to use the cubes to organize (i.e. Barbies, cars, dinosaurs, etc.). The top 2 rows have some tubs of things like Legos, and stacks of games. It's worked out pretty well, although getting it up the stairs was a trick - the boxes were REALLY heavy, as The Professor can attest. It also bolts to the wall, so I don't have to worry about anyone toppling it over on themselves. It has a flat top, so all the pottery creations the kids keep bringing home (and can't bear to part with) have a place to live other than on my kitchen counter.
Dealing with "stuff" is definitely an uphill battle, but I've found some pretty good motivation - catch "Hoarders" on A&E - I've been watching it on the computer (being a cheapie, I don't have this channel on the actual television) and it always gets me going to clean out a nook or two!