There are two schools of LEGO storage, either keep blocks together in one big pile, or separate blocks into groups - by set, color, or type of block. When your child is younger you probably want to go with the "big pile" option (this will help with cleaning up, too!), but as kids get older they may want the LEGO to be sorted. Here are 5 storage possibilities for each option.
Top Row:
1. LEGO storage bricks, that look like LEGO. These bricks can be stacked together as your collection grows. Available in a range of sizes from small to extra-large at the Container Store.
2. The amazing Lay-n-Go. A large sack that opens as a playing surface, and then can be drawn together again, making clean up easy. The sack itself could be hung from a sturdy wall hook.
3. What about setting aside a sturdy dresser drawer from an under-used dresser? This is what we decided upon at our house. The whole drawer is lifted out of the dresser before play time by Mom or Dad.
4. Adapt an old fruit crate or other vintage box. A vintage box like this one in Jack's Vintage Big Boy Room with casters added is perfect, transportable store option for LEGO.
5. Under-the-bed storage is a great out-of-sight option for a big pile of LEGO. Look for something with wheels like this one, also from the Container Store.
Bottom Row:
1. Apothecary/library card catalog drawers. These sought-after drawers (like this set on Etsy) would be great for LEGO storage, if you are lucky enough to find a set for a reasonable price. (For faux-vintage options, check out Land of Nod's Circulation Chest, or Target's Library Style Storage.)
2. A vintage soda crate like this one, also from Etsy, would work for a small collection, or a large collection of LEGO figurines. Be sure to sand any rough edges before using. h
3. IKEA's TROFAST storage system. Allows you to choose the size you need and colors of the crates. Great for a big LEGO loving family.
4. IRIS' LEGO storage drawers. Made just for LEGO, complete with a playing surface on top.
5. For the LEGO sophisticate, store sets in original boxes. These could be kept on a bookshelf in the way one would store boardgames. While this may seem like an option only for much older kids, we use this at our house for the Duplo train set. We keep it in the kids' closet and take it down to play with on special occasions. Doing this makes our "big pile" LEGO collection smaller and easier to store.
How do you store LEGO at your house?
(Images 1-2, 4-10: as linked above. Image 3: Alison Gerber).











Shaw's Original Fir...
We have them sorted by color with a separate box for "little pieces" and a separate box for minifigs and their accessories. We use Ikea SAMLA boxes with lids. The lids don't snap (just rest on top), but they are stackable and a great price so it works for us!
http://www.ikea.com/us/en/catalog/products/70102972/
When my sister and I were little we played with our legos on a sheet and when we were done playing all we had to do was throw all the straying pieces on the sheet, lift the sheet with the legos in it and put it in the box. It made cleaning up so much easier and faster.
Storing loose/freeform Legos isn't really a problem for me. My problem is that my son prefers those insidious Lego sets that only build one thing. We have an entire fleet of Star Wars ships and vehicles that will fall apart if you look at them sideways, and no ideal way of storing those. I might need to build a hangar.
@annef have you considered suspending the flying Star Wars ships from the ceiling, something like this?
http://www.brickshelf.com/gallery/jmenomeno/LEGOPalooza2006/legopalooza0005.jpg
We just have a basket where we keep all the legos. My daughter contributed her pink box to the bin and they build happily out of there. My son likes to keep special creations in a box he made. We have just hit the time of more complex models that he wants to stay together - - and so we were looking at installing a display shelf for him. I do like the hanging solutions for the ships that googerber presented. The x-wing would look cool flying around and hopefully it won't break if you don't touch it.
We turned a cheap storage ottoman into storage for our large Duplo collection: http://potteryblog.com/2012/07/how-to-make-a-new-top-for-a-storage-ottoman/