I started off the new year with a nice, cleansing stuff purge. I don't really schedule them, but they seem to happen about annually - usually coinciding with me moving somewhere, or just wanting to move somewhere. (Though, it should be noted - I think and talk about purging stuff almost constantly. I should write a book. If only to spare my friends from hearing about it any longer.)
The bulk of it consists of going through all my clothes (/shoes/accessories/kitchen appliances) and reevaluating their awesomeness. If it doesn't fit, if it isn't in good shape, if I haven't worn it since the last purge, I donate it. Sometimes it's difficult to make the call; sentimental value can attack - I mean, attach - at a moment's notice, and seemingly without reason. But I have yet to regret anything that I've let go of. And - it gets easier the more you do it, especially after you experience the immense, pleasurable freedom that comes with parting ways with crap.
Leo Babauta has written extensively about decluttering, and how it can be hard, and how it can be valuable, on Zen Habits. Highly recommended reading.
My favorite part of donating stuff - besides the fact that my trash is turning into someone else's treasure - is how easy it is. I've been using the Vietnam Veterans of America's free, super-easy and convenient pick-up service for the last few years, and I cannot recommend it enough. You go online, give them your address, select the date you want them to come pick up your donation, and then put your donation out on the porch/curb/driveway on that date. That's it. Oh - actually, the last step is feeling like an enlightened zen do-gooder princess.
Now go open your closets and make sure every single thing in there is awesome. And if it isn't, then donate to someone who will think it is. It's that easy.