I'm going to be in the minority on this one, but here goes:
1) the danger posed by older cribs is incredibly overstated. Over a 10-year period, 30 children died, out of over 40 *million* children born. And many of the deaths were attributed not to the design of the cribs, but to parents' inability to assemble them correctly. Despite the less than 1-in-1,000,000 danger, the CPSC not only banned the drop-side cribs, but you cannot even legally *resell* them (or even give them away!), even at a garage sale. Some family friends gifted us a good, old, solid drop-sided crib when we were married, and we've used it with all five of our kids with no issues.
2) Instead of cosleeping, we put baby in a pack-n-play in our closet for the first several months before transitioning to a full-size crib in another bedroom. It's close enough that we hear the baby when he/she actually needs attention, but it mutes the incidental noises from breathing, stirring, or minor whimpering. My wife and I are easily woken by that kind of noise, even if we can sleep through each other's snoring!