Yorkie24U ... that's the way Toto's area is set up ... we also put a tarp or a heavy duty shower curtain down and set the X-pen on it. That way she isn't on the carpet/ground and we don't worry about dirtying the carpet or germs in the ground! Since we move around so much, Toto associates with "her things" rather than her surroundings and adapts quickly. Also, we have found that if we find little doodles on the carpet, it's a result of poop temporarily hanging on her fur rather than her pooping on the carpet! We were happy to learn that because for awhile we thought she was going on the carpet! When Dr. Lucy groomed her she showed us how to "band" her little tail and each side of her skirt in the back to avoid this problem. It's sooo cute ... from the rear she looks like she has three little pony tails!!
FunkyMunkie ... are you able to spend a lot of time with Luna or are you gone during the day? Perhaps we had such success in training Toto is that I am with her 24/7. I am so fortunate that I can do this because otherwise I would probably be beating my head against the wall!!
Good luck and I hope this is helpful.