C.O.
well, I don't co-sleep so I would have the 2 year old and infant in the same room. The 8 year old is getting to the point where she will need her own space.
If I had a boy instead of a girl - I would STILL put the 2 year old and baby in the same room then start hunting for a bigger home....
Personally - if moving was an option - I would chose moving...each child will EVENTUALLY need their own space...so if you move now - then it will be easier on everyone!!
CONGRATULATIONS!!!!