The cardboard used to separate wine bottles is, wouldn't you know, the perfect size for keeping fragile ornaments in check. For smaller ornaments, utilize beer packaging. Here's an extra tip: to maximize storage, cut the cardboard dividers into halves or thirds, and place another piece of recycled cardboard between each layer. That said, we found that the newer, "shatter-proof" ornaments stacked just fine without having to trim the packaging.
This should come in handy to make sure that all your holiday favorites from this year make it through eleven months of storage in 2011.