Hi Olivia. I'm with those who say go with the co-sleeping flow. Apparently, 90% of the world do it (don't ask me where I read that), while researchers at the Centre for Child Mental Health advocate co-sleeping until age five ... so it can't be sooooo bad .
But equally, if someone can get their baby/toddler sleeping happily in their own bed without upset, that seems fine to me.
We're late to co-sleeping - it was attempted but didn't work at all in ds's early weeks, but I have been sleeping with ds since moving house in May, a month before his second birthday. By and large, I'm happy with it. The snuggles are great, and I would agree wholeheartedly with Franny that you can see how much it bolsters him - confidence-wise, emotionally, security-wise, etc. I sleep in a whopper bed in ds's room, and dp sleeps in our whopper bed in our room, which suits us all fine at the moment - not least because dp is going through a phase of snoring really loudly!
Sex isn't a problem, either - as another poster said, there are more times and places for this than your own bed in the evening. And plus, our bedroom is still ours, iyswim.
I plan to co-sleep with ds until he's ready to sleep alone (that said, I'm hoping it won't be when he's 10, as it was for a friend's daughter!). The only major gripe I have with it (and I suppose nothing's perfect) is that ds takes ages to go to sleep, so I lay with him for usually 1 to 1-and-a-half hours every evening while he winds down and eventually nods off. This drives me crazy some (well, lots) of the time. I wish he'd go to sleep by himself, and then I'd join him for the rest of the night; we haven't been able to have friends over for dinner/the evening since we moved, and I need time for myself.
But again, you can really see the benefits, so we'll be doing it a while longer. It's worth adding, too, that many co-sleepers don't experience this much of a drawn-out bedtime, so it can be all-round great .
Enjoy it. In my most frustrated moments, I remind myself that this snuggle time would be something you'd sooooo want to experience again, if you could, when you're 80. It?s precious.