We co-sleep with both of ours.
My older child wanted to sleep on the outside before we even started thinking about the second child (haha maybe thats why we got the second one on the way).
I did start thinking of moving our older child out before the second one arrived but I was parenting alone with my husband away with work so I did not want to be up and down in the night.
I will not say its easy and often B2 wakes up B1 or B1 wakes up B2...or both wake up ME.
I think we are getting better though.

First up - we live in Japan, and so we sleep on futons, not beds, which makes everything much easier (and safer, because of harder bedding).
When No 2 arrived we just moved No 1 to my side, and put No 2 in the middle. Once the older kids stopped breastfeeding, they became big daddy fans, so it was no trouble. I even wondered if the "daddy daddy" thing they all did after weaning was their way of compensating for loneliness due to the new baby getting all mom's attention.
When No 3 arrived, we put No 1 and 2 sideways (on daddy's side, of course) with their heads near me and feet pointing away. Now No 3 sleeps with them too, and my wife and I have a whole double futon to ourselves, but still easy access to kids for cuddly time.
Of course in the morning, everything is complete chaos, with everyone piled into the grown-ups' futon, bodies flailing in all directions. Sometimes it gets so crowded, I sneak over to the kids' futons.

One technique that we used was to "top and tail"... Daddy and toddler shifted so that their heads were at the bottom of the bed, while I slept in the normal position with baby. (We sleep with just a duvet, so there is nothing tucked in at the bottom of the bed.)

This might not be an option for all beds, but worked for us by making more room in the bed (since ankles don't take up as much room as shoulders) meaning everyone was more comfortable.

Warning: not recommended if hubby has smelly feet!

When Number Two was first born, Number One would sleep between the husband and me. The baby would sleep next to me on the outside, tucked in the crook of my arm, yet on top of it. (It's hard to explain for some reason, but easy to show.) The husband and the older child both squirm a lot at night, so my body was the buffer.

It didn't matter, though. At three months, Number Two decided she didn't like sleeping with anyone else and wanted to be put in bed alone with her paci, puppy blanket and her music & light thing. She goes to sleep that way every night at her preference. The older one still ends up in our bed frequently.

We had the same situation with number one snuggling up to me every night and I remember worrying about how we would cope with the new baby, coz she was the same, crying out if I even went to the bathroom at night. About a month before baby was due we bought a single bed which went next to the king bed, all the same level so heaps of space. Then we made a fuss of our older daughter's new bed and put the bed on Daddy's side and she was fine. Often still ended up in between us at night but started out every night on Daddy's side. Then when our new little one came along she went on my side and it helped number 1 not wake up too much coz she was on the other side of Dad. Am now due to have our third baby but this time I'm not so worried coz things just seem to have a way of working out. We have now got a cot with one side down (also the same level as the bed) as well as the king bed and single bed so the room is one big massive bed. Our number 1 will still be on Daddy's side, number two in the middle and number 3 on my side. We also have two single bed's next to each other in their own room, so our number 1 decides which room she wants to sleep in that night and usually either Daddy ends up in there with them, or they come into the big bed. Lots of beds seems to work for us! Good luck with your new babe they are soo cute! ;)

Hi! My husband thought I should comment since we currently have all four of our kids in bed with us!

With two, you could either keep the older in the middle if your bed is right up against the wall where your infant wouldn't be able to fall out or put the baby in the middle and get a gate for the side so your toddler doesn't fall out. (We dropped our mattress to the floor to avoid all the safety issues of someone falling out!)

My kids sound just like yours as far as waking up the second I leave. For that reason, my husband was in charge of nighttime diaper changes (which didn't happen that often beyond the first few weeks.) I stayed in bed to nurse and used a small booklight until the baby was a pro at latching on in the dark. As soon as I could, I nursed lying down to minimize the disturbance of me sitting up and laying back down. My toddler was fine with it all because he had my hair to play with.

The first 4 weeks have always been a little rough for us because the baby is such a noisy nurser and not so great at staying latched on, but then things settle down.

By the way, we tried the co-sleeper route, too and I found it really inconvenient for nursing. I ended up only using it for a short while to hold my alarm clock before we dropped our mattress to the floor. (If you're serious about one, we could sell you ours which has been stored in the closet for 3 years!)

I think its great that you're giving this so much thought and being so respectful of your first son's needs. If you have time after the baby's born, I would love to hear what ended up working out for you. Feel free to email me if you have any questions you think I might be able to help with!

Good luck with everything!!

With each child we've had different adjustments had to be made. Our hardest transition was when #3 was born. #2 was just like the writers son. He wanted nothing to do with Daddy and woke up if I moved away. When #3 was born we had #2 put his head on a pillow at the foot of the bed. This didn't always work but we had to keep working at it. Also because of #2s emotions we had #3 in a bassinet next to me until she was a couple of weeks old.