Ang, you sound similar to me. I did have older brothers, but they were 9 and 10 years older than me, so there wasn't really much fighting between me and them, though there was plenty between them, since they're only 16mths apart, just like my two eldest kids.
I try to ignore it until it's a bit more serious, or if they're physical, but that seems to be happening more regularly. I would really love it if they would just go their separate ways when they're too in each others faces. There is tonnes of room in my house, there is no issue with having a room to themselves to cool off and chill out.

Arcadia, maybe I should try the outside thing too. Go outside until you both figure out your issues with each other, or you can sleep in the cubby house!!! (J/K!)

Rouge, I think that's what is the problem, in the past their arguing has just been that, they have little spats, then all is well in their worlds. But lately, probably since DD started big school and DS1 started pre school, they've been name calling (just silly little kid words like poo head, dumbdumb and slug, which comes from DD more than DS1) but to me that is the beginning of it all! DS1 has also started hitting DD pretty seriously, and DD is starting to retaliate (though not so hard hitting as he can be). So I really want to nip it in the bud, but I want them to figure out how to talk to each other too.