Arcain, now that I have a child my standard baby shower gift is 3 clear plastic storage bins and a package of size 2 diapers. I decorate it up and make it look nice, but I always get that call 3-4 months into a babies life from a mom saying it's been the best gift!
I have 2 empty bins on the floor of DD's closet (not stacked - currently labeled 18 month clothes and 24 month clothes . As DD outgrows things, I toss them in that bin and as needed, we pull stuff out of the 24 month bin (in which we have new things that didn't fit, as well as hand me downs we've inherited, washed and sorted). Other bins of larger clothes are stored in the attic.
Each bin honestly stays around for a year, once it's full I move it up to the attic - so next Spring I'll pull out the 18 month bin, rewash everything and send it either to my Mom's club consignment sale, bring it to the nearby Children's Orchard for store credit, or donate it to Savers for a tax deduction. Consignment and donation places don't have the room to have off season stuff - and it gives me time to sort of mentally separate from the items in the box.
Also, clothes vary so much in size. DD, who just turned 2, seriously still wears quite a few pairs of 12 month pants, so can't get rid of stuff just because he hit a birthdate (although, I do that too - just because she has so many clothes!)