Yes, we have a playroom and have since DD was about 16 mths. I looooove it. Definitely keeps the toys out of the living space. If something strays, I tell DD to take it back. She is also responsible for keeping the playroom tidy now that she's five. If there are toys left lying around for the once a week mop and clean, then she knows they'll disappear. It's easier to set up bins and shelves for toys and books when there's plenty of space too.

We also have a TV and video player (the old fashioned kind - she can't break videos!) set up with a couch. Surprisingly, it doesn't get turned on that much. But it's there if she wants it.

Our playroom is in the open plan area off the kitchen, so it's not able to be shut away as such, but on the other hand, I can still keep an eye if kids are playing in there. (It can't be seen from the lounge room of an evening though, which makes me feel better!).