With 3 aunts, 2 sets of grandparents, 2 great-grandmothers, and a mom and dad, my kids have way more toys than 2 little boys should have. One of the ways that I save my sanity is by rotating their toys.
Have you ever noticed at preschool that teachers have perfected the art of rotating the toys? One week, the kids are learning about outer space, and voila, a space shuttle appears with all the astronauts and accessories. My son was thrilled to play with them! Can you imagine the toy would hold his interest if he was able to play with it all year? No, it's because it was new and different.
I try to do that at home with all the toys that we've collected as gifts. I have various containers that I use to group "like" toys (like the Little People, Legos, Matchbox cars, etc). Then, I put those containers away for a period of time. They still have plenty of toys to play with, but they "forget" about the toys that have been put away. After awhile, I'll bring back the toys from storage (and put away the current toys). You would think it's Christmas at our house again - the interest they show in their "new" toys.
What do you do to keep your kids' toys from overtaking your house? For more ideas that work for others, check out Rocks in My Dryer.