I have moved away from the girls each picking 3 toys. It wasn't a successful exercise for us, but putting toys out of sight was a nice step. When the girls said they wanted more toys out of storage, I had them ask for specific things.
Here is where we are at now:
1. Bin of Legos
2. Stuffed Animals/Dolls
3. Piano & Radio/CD player
4. Bin of Coloring Books
5. Wicker Basket of Toys - princess dresses, hair design kit, doctor kit, play computer, Noah's ark, stacking cups, Uno Moo Game, Brain Quest
The big unknown at the moment is the Barbies. The girls haven't asked to play with them yet.
My hope is that we can get to the point that all toys we own fit in the wicker basket, no more.