Legos are a big deal in my house. A very big deal. My boys may be below the recommended age for most Lego sets, but their enthusiasm rivals the most ardent collector's.
As such, we have already collected (thanks to gifts, Ebay, garage sales, friends, and their Dad's childhood) quite a few Lego sets. I am still working on the best way to organize Legos and still have them available for easy play. Right now we have a couple large plastic tubs - one for smaller pieces and one for bigger. It works for now.
The instruction manuals are another matter though. My boys like to follow the instructions and build and rebuild their sets in addition to free play. However, the flimsy paper manuals, especially from the older sets have seen much better days :(
This is my solution. I got a three ring binder and my trusty laminator (This is the one I have - it was twenty bucks at Costco). I carefully took apart each one of their Lego manuals and laminated them, punched holes, and added them to the binder. Now all their Lego instructions are in one place, lay flat, and won't get ruined.