Our playroom is really just the spare bedroom. Most of the toys are stored in the closet. The kids don't have access to the closet itself (yea for childproof doorknob covers!). There are always a selection of toys available in the actual playroom.
At any given time the kids usually have:
2 or 3 puzzles at a time- the rest are stored.
Blocks or legos.
A small basket of hotwheels or a couple of bigger trucks.
One game (memory, candiland, shoots and ladders, etc.)
A selection of dress up clothes.
Crayons, paper, and some coloring books.
A basket of books (these get changed VERY frequently!)
One or two musical instruments at a time (shakers, wooden xylophone, tamborine, bongo drums. etc)
A few other favorite toys are also rotated in and out: the dolls and cradle, a small play kitchen with wooden food, a basket of train tracks and trains, the farmhouse with animals, toy dinosaurs, etc.
As for how often I switch out the toys- it just depends. On most days I swap out a couple of things for something new. Somedays I don't. Sometimes the kids will play with a certain toy everyday for weeks on end, other times they might tire of the same toy quickly.
Other than crayons and paper the other art supplies also stay in the closet. I learned the hard way that glitter, glue and scissors do not always have to be accessable! LOL...
I also have a small home daycare which is why we actually have an entire room (albeit a small room!) dedicated just to the kids' toys. I don't know what we'll do when we actually NEED that room for our own son since our house is pretty small...