Our toys used to be located in the main room in our basement - it was a huge area. To move to this smaller playroom required lots of storage areas. There is a playhouse built in to the playroom (it's under the stairs) and so inside it we built in lots of shelves.
There was an area that was already studded, but there was about 2 feet behind it that seemed like dead space. We didn't want to remove the studs (what if they were load bearing) so we built the shelves inbetween them. Maybe you can tell in this picture what I'm talking about:
The shelves hold bins for small toys. If you're wondering, they are: polly pockets, puppets, food for the kitchen, plastic animals/little people, Mr. Potato Head, and a couple I can't remember right now. The area on the left is left open for a closet of sorts. Dress-up is big in our house, so there are two rows of hooks (upper and lower) for the big dresses, then drawers for accessories. Baby clothes also take up a drawer.
I was so glad to get the dress-ups out of my daughters' room - now all the mess when friends come over is contained in one area. And I can say "only play downstairs" - perfect.