I agree that the first thing you need to do is simplify. But do a general sweep first-if you KNOW it needs to go, get rid of it. The minor things (going through and examining every single item in a drawer, etc.) can wait until after the first big sweep.
One thing that helps us is that we spend most of our day downstairs in our house, so while the living area gets messy it's easily contained. The upstairs is mostly bedrooms, so we just stay out of that. I also gated off the kitchen (DS is 1 and gets into EVERYTHING).
I do a load of laundry every day and it helps a ton. Toss in during breakfast, put in dryer during breakfast clean up and I fold while DS is playing and set it on the stairs. When it's nap time, I carry it upstairs and put it away. Totally manageable.
I also don't get too particular about where toys go. We have a bucket for the Legos and a basket for all the other toys. So when it's clean up time, we just toss.
As far as eating goes, I've had to cut back my time in the kitchen. :( It was hard at first, but our lives are so much easier. I just do simple, simple meals and they can still be healthy!
I also hired someone to come and do yard work. It's a homeschool kid in our neighborhood who was looking to earn extra cash. He gives us a fair deal and it is the BEST money we have spent. I can not tell you how much stress has been relieved from both DH and I (we used to share the yard work). And the kid is THRILLED with the extra money, so it's a win-win for all of us.
As far as the daily stuff goes, we do it after DS is in bed for the night. It really doesn't take long-maybe 15-30 minutes. We do a quick clean up (mail, etc.), trash goes out, floors get swept/vacummed (downstairs only, I do the upstairs once a week as it doesn't get dirty), counters get wiped, etc. On weekends, anything else that needs to be done (more detailed cleaning) one of us will do while the other watches DS.
I don't keep a spotless house and that's okay by me!