So here's a GREAT question. Great in that, "wow, it covers so many issues" way and, also, great in that "holy crap where do we start?" way... I'm doing this in parts because, well, there's lots of parts:
OK, right off the bat, I just have to suggest that whatever you're thinking, the 2.5 year old will have some problems with whatever transition you're going to make, given he's in a MAJOR developmental transition. Doesn't mean you shouldn't make changes, only means that you should be aware of the crazies that might ensue. I realize I haven't written yet about the 2.5 stage on this blog. Bad me. VERY soon I'll get into the details. Like... tomorrow. As for the 7-month old... If you're going to do anything dramatic, DO IT NOW! 8 months is just around the corner and that's a tough age for change.
With D, he had a nice smooth transition to me laying with him on the bed to nurse, falling asleep and me leaving him there for naps. I could even move him to his crib/co-sleeper and he was fine as he got older. He'd cry at first and then be fine. Same happened when I night weaned him. Easy CIO and was done. Q was a completely different story. Actually, she's a lot like how M is now.
Little Miss M naps in her car seat in the Graco Sweet Peace (swing) and I can nurse her, put her in there awake, and she'll scream a bit and then fall asleep. But it's playing music and swinging. If I do the lay down/nurse thing with her, she pops right awake when I get up and it's all over. Of course, I have not actually tried putting her in a crib (D is still in there) and the playpen was a disaster because she'd stay asleep and then roll over a few minutes in and wake up screaming her fool head off. Admittedly, I've been lax on the naps because I'm chasing after the other two. But, for the most part, those are okay (although I want to get her on a solid flat surface and not always in the swing...
You're in a great time of resilience for your 7-month old, so any major change you want to make will probably go reasonably smoothly. You seem to be ok with some pretty proactive sleep-training methods: you can put those in place for naptime anytime (like, now) you're ready.
OK, everyone following that? Yeah, YOU try having 3 kids under 5... Here's my distilled advice, after making far too many flow-charts to get this all straight. M is at a great age to make the transition from co-sleeping to her own crib. Wait another month and it will be SO MUCH HARDER. And you're really fed up, which means a lot in my book. You can't be the flexible, connected mother you want to be when you're sleep-deprived and starting to feel fed up. So, I'd say: Go for it! Move M to a crib or crib-like thingy.
But here's the problem, D is 2.5 and that means real upheaval, developmentally. The short story is that he's going through a major cognitive-emotional transition period. I'll write more about it in a post unto itself tomorrow, but one of the main components of this stage is the onset of JEALOUSY. So, before this, he didn't have the capacity to feel the real force of jealousy (yeah, he might have been whiny when he wanted you and you had his baby sister in your arms or at your breast, but NOTHING like what he's feeling now or will be feeing very soon). Because of this sudden developmental onset of jealousy, moving him OUT of his bed/crib and substituting his sister in his place will be, in short, a MAJOR diss from his perspective. Now, you could just decide that it's worth the upheaval. You wouldn't be evil deciding that, given the various constraints of available beds, cribs, boobs, and sleep deprivation. But if it was me, here's what I'd do:
I'd move M to a crib or some sort of pack and play or something, out of your bed (too bad you don't live close to me... I have two cribs I need to get rid of soon). It's a great age for this shift for her. I'd leave D in his crib for another 4 months or so. He's sleeping in there great, he's napping wonderfully, and everything is how you'd like it to be, except that he's got the crib you'd like to give to M. MANY kids drop their naps if they're shifted to a big boy bed during this 2.5 year old stage. First off, this stage often involves sleep setbacks to begin with. If you compound these developmentally-charged sleep setbacks with a change in sleep setting all together, you may be in for some real sleep upheavals from him. The rest you thought you'd get from M being out of your bed may end up being compensated for by the crazies that might come from D. Also, switching him back and forth from his new "big boy bed" to his old crib (just for naps but not for night), where his baby sister will be sleeping at night, will be very confusing for him and might make him less likely to sleep in both settings. Many kids really get comfort from the feeling of their own space, their own bed, their little den. To try to get him to switch back and forth, in a time of transition (nap and night), will probably be very difficult.
This is really, really hard because you're balancing the developmental needs of two children, one of whom is in a great resilient stage and the other who is in a vulnerable, sensitive stage. The oldest will probably do just fine with having her brother start sleeping in her room (5 is a nice stable age). Add to the mix that your own needs have to be met and you have space constraints and it seems silly to purchase an extra crib... well, it is really tough and very typical for many families dealing with siblings and their conflicting sleep needs.
But, of course, you guys should know me well enough by now to know that I never think things are so absolute. So... if you're desperate, and you really don't want to buy a second crib or move M to his brother's room for a few months, you COULD try to play the "big boy" card big time. If you go the route of change everything all at once (OY!), here's how I'd do it: You could keep in mind D's probable issues with jealousy and let him know how SPECIAL and BIG and GREAT he's been, so much so that you're going to move him to his very own SPECIAL, BIG BOY bed, in his BIG SISTER'S SPECIAL room. Really make a HUGE deal of how much you love, care, respect, need him. In other words, make this transition the foundation for addressing his probable jealousy. Take some extra time to be sensitive to what this move means to him and make it clear to him how special his role in the family is. Also, pay extra attention to his emotions and perhaps connect with him on how hard it might be for him. I don't mean to sound extra hokey, but it really is a sensitive stage in his little world.
Any other moms with more than one child who are dealing with a similar situation? How do you decide whose needs to prioritize? What would you do in this situation?