How DO you organize?

Since we moved I have been on a real kick to downsize, organize, sort, throw away, donate.......I realized when we moved we have a lot of stuff.  I mean A TON of stuff.......It is disgusting. We have everything from extra unworn clothes, toys, piles of paper, listened to CD's, movies we have not watched in a few years, books both read and unread, plethora of dishes, not to mention all the stuff my mom is storing at her house, to the point that we have kind of forgotten what we have and don't have.

So since we have moved I have thrown away a lot of "stuff" that Goodwill will throw away themselves.  I have also given quite a few boxes to local donation sites and it feels good.  I think to myself "WOW I am awesome I am making so much progress" until I turn around or open another closet or box....I think someone is adding miracle grow to our stuff while we sleep.

Even though this is just a snippet of our stuff it helps to give a picture of what I mean.

There are some things that Jeff is hesitant to let go of as am I, however, it is time to start making a simplified life.I read a quote somewhere that says "The less you have the less you have to clean"  AMEN!!!! So that is my goal I would love to see us be able to have all of our stuff under one roof, which means letting go.

So I have a few questions and please leave your thoughts.

How do you organize your home?
How do you "let go" of items that are taking up space, but the mere fact of looking at it brings back a flood of emotions?
What do you do with all of you CD's that you have not listened to or that you have ripped and put on your computer?
What organizing tips do you have that are simple (I do work part time so I am not at home all day) that are not time consuming and that young children can help you with?

Please help any ideas are welcome.  I want a realistically organized house not a house where guests feel uncomfortable to be in.

Thank you for your input.