We have five children, ages 11 to 23 months, in a four bedroom house. Three bedrooms are upstairs and one downstairs. Over the last few years we've cycled the two oldest into the downstairs room by themselves but I always felt odd having them down here alone. We finally decided to put both boys in the smaller upstairs room with bunkbeds and the 3 girls in the larger room with bunkbeds and a crib, with the downstairs room having all the toys. We don't really have much arguing when cleaning up because it's mostly clothes in their rooms. The biggest arguments come from deciding what to listen to when going to bed. Everybody reads for a certain amount of time then when it's time for lights out they can listen to the radio, a tape, or CD very quietly. The girls generally agree but the boys don't. Older DS wants country or his CDs while younger DS wants his tapes. I refuse to let older DS fall asleep with headphones in so I think we'll just get a separate tape player to put up with younger DS and they can each listen quietly from their beds.
When they have friends over they get to "camp out" on the sofa bed so that solves that problem.
I really like having everyone upstairs. It feels much safer and if DH and I are up late we don't have to worry about disturbing a sleeping child down here.