S.C.
I didn't have a choice as we only have a 2 bedroom place. I now have 3 kids and they all still share a room. Its crowded, but I never had a problem with them waking each other up... even when one was a baby and one a toddler. They'd sleep right thru it.
In fact, when it was just my oldest daughter and my son was a baby and he would cry as I was putting them to bed, my daughter would just start singing to him. He'd stop crying and usually fall asleep within 2 or 3 songs. It was the best thing I ever did.
That was 8 years ago, and they are still sharing a room. For siblings, (all 3) there is very little fighting and they play very well together.
We will be moving next month into a 3 bedroom home and giving my oldest her own room. The other 2 don't want her to leave because they love sharing a room with her. They'll get used to it, but its a little funny to hear them complain that they DON'T get to share a room with her.
Good luck! It should work out just fine.
S.