A peek at the "yarn room" in my basement:
My father and I built this cabinet together in spring of 2009. The design came about from a discussion on Ravelry. It took us about a week and a half (most of which was sanding, as I recall) and came in under our budget at $160 for the lumber. The final dimensions are approximately ten feet wide, four feet high, and eight inches deep.
Before the cabinet, I had yarn stashed in the guest bedroom dresser, a closet in the basement, in baskets under the bed and couch, and in two pieces of wicker furniture. And it all fit into my lovely 40-square-foot cabinet of yarn. Except the works-in-progress, which still live in the wicker furniture. And I've kind of gotten addicted to sock yarn, so I need to reallocate space within the cabinet because my stash is starting to leak out.
Having the ability to lie on the couch and look at all my yarn at once has been great for inspiration. If you have stash living in dark or separate places, I highly recommend you consider throwing it all into a big pile once or twice a year to see what ideas pop out!