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We have Ikea bookshelfs and fabric storage cubes for the toys. I separate them by category, and put each category into a different cube (e.g. musical toys, cars, puppets, etc...).

In the living room, I have giant open bin system http://www.kaboodle.com/reviews/whitmor-kids-12-bin-organizer--pastel-3 for smaller toys. I labeled them: music, garage, zoo, art, office, puzzles. Near the bottom is a basket for her shoes and a basket for blocks. Then I put all the stuffed animals on an enclosed box of 'rotational toys'. Then I put books in a simple basket. All the cars, toy kitchen, rocking horse, giant toys are just lining the walls of the kitchen/ living room. I have a huge open space in the middle to play. For her room, I was given this: http://www.target.com/p/delta-enterprise-princess-book-and-toy-organizer/-/A-13260277 ...it holds more books. Then art supplies go in my arts and crafts drawers.

We have different toy boxes. Her stuffed animals get piled on her pottery barn chair. And her books go on her little bench. One day I'll get more organized.