I have a pretty big closet with lots of shelf room, but in college I used a hat stand and hung most of them from that. Then I had enough room to store the nicer ones with dust bags in my closet.
I have a little alcove in my room and I use the wall space in it to hang my purses and scarves on. It's really cute and it's a great way to display all my little bags for easy picking. I keep the expensive ones in dustbags in my closet, usually in the original box. But for smaller, cute purses the wall is the way to go.
I have my designer bags in dust bags lined up on a wicker shelving thing, which is right next to a giant, rectangle, wicker laundry basket. I stuff my bags with old tees and socks (that have been washed, obviously) to help keep their shapes and just throw them all in. I have a TON of bags, though.
i line mine up on shelves in my closet. i'm really bad about keeping them in their dust bags (the few that i have that came with them anyway)
a few years ago i saw a small little article/profile in vogue where a girl placed her (very pretty) bags on her sofas/chairs... like instead of a throw pillow... she'd use say two pillows and a beautiful bag or two. not practical for when guests come over, but it made a great photograph.