How old is your baby? My tip is not to create a playroom, unless your children are older. You will be tempted to buy all those huge plastic toys and castles that you see at yard sales.
Your baby wants to be in the same room as you, and I found that having a toy basket in the family room was enough. With decorating, paint is by far the cheapest and most effective way to go. Since you already have a racecar bed, I would look for shelving that could be decorative as well as functional. I agree with Sladesmomy painting one wall an accent color can be effective. Red might make a nice accent wall, with the blue racecar bed as focus, and I like the checked flags idea.