So now Kate has the twin bed (for guests, story time, or a sleepy mommy in the mornings), toddler bed that she sleeps in, and a nice play area. We kept the chest of drawers next to her closet. Not much else has changed. We brought in the play rug from the living room and got a shoe rack to hold her puzzles and doll house.
I love that she has so much space to play, and it can all stay organized- which it does (I think Kate is a little OCD like me). I'm sure there will be many more changes to come. Adam wants the kids to share a room at some point, and I think there will be bunk beds involved. But for now (and the next year at least) this is Kate's big girl room.