Oh, the hours we've spent in the rocking chair, singing songs and reading books, trying to help someone relax and, hopefully, sleep. That is where I first thought, "Wow- it is awfully bright in here. We need room darkening curtains. That would really help this boy sleep!" I have no idea how much having a dark room helps- in fact I worry that I am training them to only sleep in dark rooms with white noise drowning out all of the ambient noise.
Room darkening or blackout curtains are sold from most places that sell curtains. The ones I purchased from JC Penney's are no longer available, or I would recommend them. If you already have a curtain you like, you can line them with blackout fabric or a double layer of polyester felt. Linings can be sewn to the existing curtain if you are so inclined, though I just used safety pins to attach them. I left extra felt on the sides of the curtains in one room, and I use that excess fabric to stuff beside the window frame and the roman shade that gaps too much. It makes it more frustrating to re-do each time we open the window, but the results are fantastic, and it is certainly a cheap option.
The trouble with room darkening curtains is that our eyes adjust so well to different levels of light. Once you block 80% of the light, all of the light spilling around the sides of a curtain seems just as bright as the whole room used to be. To minimize this, hang the curtain as close to the wall as you can-many modern curtain rods stand out from the wall quite a bit, but that only allows more light to bounce around into the room. Also, make sure your curtain is the right size- it should be hung 3 (or more, if possible) inches above the window, a few inches below the windowsill, and a few inches or more to the left and right of the window.
What have you tried to make your atmosphere more sleep friendly? Did you do anything in the first year that your kids were later unable to sleep without years later?