For us, the arrangement has been pretty problem-free. Before Ray was born, I slept in the master bedroom, in the queen bed that used to be our marital bed
(DH moved into the spare room to sleep on the futon months before, due to my constant bathroom trips and beached-whale tossing all night long). DD slept in her own little bed in the same room, a few feet away from mine. DH slept on a futon.
Now that Ray is here, DH has taken my place in the master bedroom, while I sleep on the futon with the baby. It works out well for us, since DH can settle DD down when she wakes up from dreams (she sleep-talks too), and take her to the bathroom in the night if she needs to go. I nurse the baby lying down, so co-sleeping is a godsend. The change table is also in the spare room so I can easily change the baby at night. He's had some good night and some wide-awake nights, so we're still adjusting, but so far it's been as expected.
How are things at night for you?