my boys sleep in their crate at night. They have a foam egg crate covered with sheepskin, and three blankets, one for each little guy (for covering up with and cuddling). They love their crate. Sometimes I will find them in there during the day just hangin' out. I guess if they need sometime alone that's where they go. It's like their bedroom.
Outside their crate they have a big dog bed big enough for all three of them to get in comfortably, but they prefer to all squeeze into the old tiny one that was used when they were babies.