My wife and I are in the process of "simplifying" our lives as well. We sold our house right before the crash, changed a lot of the money into foreign currency, kicked out our tenants and are living in a smaller townhouse that has a super low mortgage payment. We paid off every credit card, cut out all unnecessary spending, hardly eat out, etc. We're going through our storage and garage and selling everything we don't use on eBay which turned out to be great! We even sold pants, skirts, shoes etc that we don't wear and we are getting a lot of hits. Not only the clutter is disappearing but there's extra money in our bank account. We both have excellent jobs and make a very good income, but we know tough times are coming (I believe we'll see the "D" word not just the "R" word) and we want to be able to live on 1 paycheck and not touch our savings. We're still working on cutting our last "vice"..Starbucks coffee..but we're getting there!
We're not getting rid of the Porsches, tools etc. My passion is playing music and I'm even selling off some of my guitars that I hardly play (I was up to 12).
Basically sell all the clothes you don't wear, go through your garage, storage, attic etc it's a great time to sell used stuff on eBay. Get rid of everything that you don't need, try to cook at home, eat out only once or twice a month, do simpler things with friends/family (play cards, boardgames, video games,etc) so you're not tempted to just hang out at the mall/stores and buying more stuff.
A lot of good advice by the way from the previous posts!
Good luck!