A topic I find endlessly fascinating. I always want to know how people manage this, too. In fact, I started a thread a few days ago called "Your music collecting habits". Sorry, I don't know how to link to it, duh.
Anyway, I'll quote one of my posts to that thread. I found the link contained within very enlightening:
"This article is too funny! Maybe mostly cuz I've almost crossed that line... (How many freaking double copies do I think I can accumulate in one lifetime...?!)
I especially like the advice under #7 at the bottom of the page:
http://www.stylusmagazine.com/articl...rd-licking.htm
'What seperates the freakish collector from the monster that is the Licker can be summed up in one word: proportion. Understand your place in this world, and understand the impossibility of ever comprehensively knowing all there is to know about even one genre of music, and you should make out OK. There is no need to panic, to paw, to obsess, or even to collect. Like what you like, love what you love, and track down one or two rare things if need be. But please, stay away from eBay. No piece of vinyl is worth getting in a bidding war over. Especially not with the Japanese—they will defeat you. And for Christ's sake, please put the records away once in a while and go outside. There's a whole world out there that has nothing to do with dusty old crates of secondhand records, or even shiny new CDs.' "