One concept regarding toys that we have heard is to have no more than 10 toys per kid. Crazy sounding I know, but it made some sense. Do ya'lls kids get overwhelmed with all the toys? I know mine just dump the baskets out and then grab a crayon to color on the wallls and furniture instead.
Some good criteria on what makes a good toy are: is it multi-functional or does it only do one thing? If a toy has been around for 50 years or so, it has stood the test of time and is probably really good. Leggos, building blocks, Lincoln Logs are all good examples of things that you can be creative with and help the kids use their imagination.
We tried a toy rotation system and it has worked WONDERFULLY! Our boys have three baskets of toys, and we put the other half of toys in 2 Rubbermaid tubs stored in the garage. We brought the "new" toys out this weekend, and they have been playing with them like crazy! I just thought I'd pass along this idea.
Simplicity is so great! It makes your house look better too!