Now that I'm an empty-nester, I've inherited the middle bedroom, which is approximately 10x12. I am having bookshelves built on the 12' wall, and will use two pieces of 4x8 foam insulation covered with batting and one 4x8 pegboard for "doors". That way, I have all the shelves but my "stuff" is hidden from view, plus I have an 8x8 design wall and a pegboard for all my rulers and tools.
I've already had shelves put in the closet for my fabric, which is wrapped on plastic sheets I got at www.polarnotions.com. I bought 300 of them and didn't quite use them all. It sure has made shopping from my stash a lot easier. I have my first dresser (I was 6 when I got it) in the closet, too, and it holds my bits and pieces (fat quarters, charm paks, etc. The pre-packaged batting goes on the top shelf, and my various machines go on the floor under the bottom shelf. I also use expandable file folders to hold UFOs, WIPs and kits, as I can put all the fabric, the pattern and any specialty rulers all in one place. They are also good for storing the patterns that come in the 5-1/2 x 8-1/2 plastic sleeves.