We just talked it up a lot and got him really excited. We also had him pick out sheets and then he got to show all his friends. We did it at 2 1/2 so I think he's definitely ready. As for the bed above, maybe you could put glow in the dark stars or something he might like (stickers?). We did it because we have #2 on the way so his toddler bed was in another room (we actually moved him to another room as well). I left it because we didn't want him to think we were kicking him out because of the baby. All of the books I read said to do it early enough that he doesn't relate the 2 together.