I just reorganized my laundry room, which has a workbench.
I bought a couple of plastic organizers - the kind with lots of little compartments. One contains screws, nuts, bolts, washers, and other small pieces. A tackle box can work really well for this.
A second one has larger compartments, and holds larger things that don't hang well - stud finder, a penlight, carpenters pencils, open-end wrenches, small paint brushes, etc.
The pegboard holds larger hand tools: hammers, saws, cresent wrenches, levels, tape measure, pliers, paint brushes (which are wrapped to keep them clean). The best way to keep a pegboard full of tools organized is to set it up just the way you like it (allowing for some expansion), and trace the outline of each tool on the pegboard with a permanent marker. That way the hammer gets put back on the hammer hook, and you know if a tool is missing.
I don't find pegboard to be all that effective for larger things, like extension cords. For those I have larger hooks that screw right into the studs.
Shelves are most effective for the small hand tools and automotive stuff.
My Mom has a great trick for keeping spare indoor extension cords organized (for some reason she has several of them). She wraps an empty toilet paper roll with duct tape (for added strength), folds an extension cord, and slips it inside the roll. She can have 6 extension cords in a shoe box without any of them getting tangled!
If the chips are down, the buffalo is empty.