It doesn't matter if it goes in a big pile in the middle of the room, just get it out of there. Put it someplace you can't stop until you're done.
Ambiguous, yes, but it's really up to the person doing the sorting. Whatever criteria you use to decide whether to keep things when it's one-by-one, use it here, to group things into a set of piles.
I usually use at least five. The goal is to have equal sized piles. (If you've heard of the bond market, they call this 'tranches', say AAA, AA, A, B, C, etc)
Take the pile that is the top shelf stuff, and put it back where you started from. Make it nice, neat, and clean (good time to get dirt off, while it's empty).
Don't worry about all the other piles, just honestly assess the situation. Is the space clean? Is it clear? Does it have all the things you'd commonly use there?
Sometimes with this part, it helps to get an outside opinion. Have someone you trust tell you whether it looks good, is cluttered, or is empty. If it's cluttered, split the pile.
Say you're organizing your drawing desk. Are all your favorite pastels still sitting behind you? Maybe you still need that ruler or the pens that haven't made it in yet. Time to go back, get another pile (the next-best one) and put it away as well.
Here's the fun part: By process of elimination, you've just decide what to store/give away/recycle without ever having to agonize over your favorite pincushion. You can trick yourself into realizing that you don't need so much stuff.
You've just reclaimed usable space, and, if you're like me, given away quite a bit to charity, which can take a nice bite out of your tax liabilities.
Do this often enough, you'll realize how many of the things you thought were 'vital' to have out are really once-a-month or once-a-year items, too.