We slept with my 2 1/2 year old until she was around 2, when she got her Big Girl Bed. She still wanders into our bed and I return to her bed with her at some point every night.
At bedtime, I lie down with her until she falls asleep. We get in bed, read one book, turn out the light, then I say some prayers (we're not uber religious, but I think it's great to bless our loved ones and be thankful!) and sing, then switch to a lullaby cd. It takes anywhere from 15-40 minutes for her to sleep.
At this point she would never fall asleep on her own. She's just wander out to wherever we are.
It's not ideal, but at least she's falling asleep at a reasonable time. To me it seems like a logical way to "wean" her from cosleeping...it makes sense that she wants someone with her when she falls asleep. Though I look forward to her sleeping on her own, it is a very sweet and tender time.
Anyway, maybe lying down with your kiddo will work and be a good transition for him.