When DD was 3 going on 4, her older sister gave her a present (DD24 painted her old bedroom pink and purple for little sis, and put a big bow on the door). We set up the downstairs bedroom for her, and from then on she has not only slept by herself, but really doesn't wake up in the night calling for us anymore. Now, to be fair, the timing of this move also coincided with DD getting to go to kindergarten before turning 4, and we think that her being able to "use her brain" also helped her sleep a little bit better.
I'd definitely believe that. I really believe DD is massively understimulated everyday. The only time she's slept through the night was basically when she had CONSTANT stimulation. It happened twice. There was one week when she was in daycare because I was at a conference and the other was over Christmas when we were with all the relatives and she was constantly being entertained. At home we just can't keep up. But on the days that she gets more in, she sleeps MUCH better!!!!