We separate everything and wash in cold water. I think with babys stuff we will separate the whites and then everything else and just have two loads of laundry for baby for a while with the baby detergent. After the first couple of months we will start to integrate a few pieces of clothing for the baby in with our stuff and regular detergent to make sure there are no allergies. But we'll see as we go I guess.
Oh and i'd hang the clothes as well. Gets them out of your way in your pressed for space and have the room to do so in a closet.