As the OP of the Temecula thread,
I thought I could put in my two cents.
What my family has learned living in both situations (small apartments and large homes)is this:
Extra space is great for storage (all that baby gear) and play areas. A yard is great to have as well once your little one is older. However, nothing beats the great outdoors. Even if you have the biggest house- your kids will still want to go to the park with their friends. You can live in a small apartment and provided there is park access (maybe even a pool or the beach nearby) then you are going to be just fine.