My lo is 9 months, has always slept in her own bed in our room. (except sometimes when Mommy falls asleep during a night feed - but did not ever do that until she was old enough to roll/move around because of TERROR about smothering)
We did this because we had no choice - we lived in a 1 -room apartment, and have now moved to an apt with one bedroom. We hope to have a 2-bedroom apartment before Christmas.
I have no idea about emotional development, she is very very attached to mommy, but also very good with people she knows and warms up to strangers in what seems to me an average amount of time (unless they are idiots about babies and do something to scare her). I attribute this mostly to temperament, not sleeping arrangements.
I do think it has hampered her development in terms of being able to sleep through the night, for several reasons - a) she does not have a quiet/peaceful enough environment (coming to bed, snoring, etc) , this has been a problem since she became aware of her surroundings around 3/4 months. b) We can't allow her to fuss/talk/play in her crib if she wakes in the night or wakes early in the am, because parents need their sleep too. So whoever is on "shift" goes to get her sooner than we would if she had her own room; besides, she knows we are there and it's just bizarre for us to ignore her when she is looking right at us, really gets her wound up! c) I bf, and it's just easier in those tired wee hours of the morning when she wants a feeding to take her the 3 feet into our bed and nurse her rather than do PUPD because she probably doesn't really need it.
I have no opinion about what is the "best" choice - we did it this way by necessity. I do have an aversion to cosleeping, for tiny babies because of safety (I am still rather overweight, and my husband is an incredibly deep sleeper); and for older babies for the sake of parent's privacy/ability to sleep well.
With dc #2 (assuming we have one), we intend to use a bedside "cosleeper" cot (the kind that attaches to the mattress but has the baby's own space) for the first few weeks, then move him/her to own crib till maybe 3/4 months, then transition into bedroom with dd#1. That's what we would have done this time if we had the choice.
