We plan on using a pack n play because we want our baby to be in our room for the first six months. After that we will use the crib we purchased, it transitions to a toddler bed as well as a full size bed.
There's probably an 80% chance your baby would end up sleeping with you. My son doesn't use his pack n play, he sleeps better with me.
I just set up my baby's pack n play yesterday that we finally got in. It's actually a lot smaller than a normal sized pack n play. It has the bassinet on top. When they are too big for that, you can take it off and let them use the bottom half. It's light weight. Less than 20lbs.. I love it. I have two other pack n plays my other two children used, but they are so big... The one we got came from Walmart. (Online). It's the graco portable lite weight travel crib. Our bedroom is also so small, that the pack n play actually saved us a lot of room until we decide to put the crib up. They can stay in it up to a year :]
I am also a first time mommy, my sister had always used pack N plays and the kids love it. I however didn't like the idea of it, so I bought a 4 in 1 crib. Maybe try looking into one of them. Newborn/infant crib, toddler bed, twin bed, then finally turns into full size bed.
I plan on using the pack'n'play. This is my first. But i am familiar with them from my nieces and nephews. I also looked into the co-sleeper-people LOVE them, but that will not work for use because of our dog. I'm due in December and our dog (she's about 20lbs) sleeps in our bed all winter whether she is invited or not, she will crawl under the covers while we are asleep -she gets cold. So i can't have the baby in a co-sleep that a-joins the bed, i fear our dog will climb on to it...
We will have the pack'n'play a couple feet from our bed.