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My daughter slept in the crib converted to a "daybed" for a while. Then I redid her room for her 3rd B-day abd upgraded the crib/bed to a twin daybed (with trundle for future sleepovers) from Pottery Barn.
At first , we did the "pool noodle" thing - where you put a pool noodle under the fitted sheet to keep them from rolling out. One thing I did notice - she stopped waking up and coming in our room almost as soon as she moved to the twin bed. When I check on her - she's every which way, so I think that she was moving around too much in the crib/bed and waking herself up.
Never considered one of the "toddler beds' - the ones I've seen look cheap, IMO
Mine went straight from the crib to a quality twin, which they both used until they were 18. I bought my son a new one, a cheap xl twin, since he continues to live home while going to college but I don't want him getting TOO comfortable! I figure this bed goes so will he!