For those with limited square footage to work with, the obvious answer is to go up. A loft bed is a great solution - it provides a comfortable place to sleep and a cozy nook for play. A built-in loft bed like the pic above gracefully turns one space into two. But if going bespoke isn't in the cards for you, don't despair.
Bunk beds (without the lower bunk) and lofted beds will do the trick. Add some draperies to fuel the imagination and add some privacy.
This is something we want to do ourselves, but we've read that children need to be 6 years old before sleeping in a top bunk bed. Anyone have their young ones in bunk beds earlier than that?
More Great Loft Beds:
Tiramolla Loft Bedrooms
(pics via LIving Etc.)