Hoarding is not really something that I am into, but I have a friend over at Milk 'n' Cookies that is struggling with a Pre-schooler, who does not want top let anything go!!
I am not really a hoarder, but I do not like waste either, so I am definitely keen on donating or selling off items that are no longer required.
I have always told my children that once an item is no longer played with or worn, that it is then needed by someone else, eg. baby toys, clothes, goods in general. I like this way, because it teaches them about recycling!!!
I would not give away anything extremely dear to them, because like Casey says, we do not want them becoming clingy to "stuff". I do not think it is healthy either to surround yourself with material possessions...
So my suggestions to someone that is faced with this issues are these:
Craft/Art string for hanging. Any ribbon, string twine raffia, whatever takes your fancy hung across a wall, I would say the child's bedroom, so they can keep the special things close to them but can still be admired by other family and friends. Perhaps you could explain to the child that you can have 6 (any number you choose really) special art pieces up at one time, then it is up to her to choose, so she will still feel in control! Once the previous 6 or so are removed, it will be up to the Parent to decide what occurs, I personally keep a few arty crafty items in their keepsake box for later...
Clothes that are too small, well get rid of them, or if you really cannot bare it, cut them into quilting squares and make a special quilt for her to keep, at least it is a useful item...
Toys, well we have a few, but not too many that are not age mutual.... by that I mean, I only have stuff that all the kids can play with, eg. wooden blocks, little people (still a hit with 9yo), pretend play, dress ups...... so you get the point.
My suggestion is this, remove all the items that you are wanting to get rid of into a box, when your little hoarder is preferably not home!!! If they do not mention it (the item), notice it, or look for it, then you will know that it was not really that important... then you can dispose of the box safely knowing you have not caused her any distress, so win win!! I would say that 2-3 weeks would be an OK time for her to notice, but again, its just a suggestion.
I wish all you little hoarders & Mama's of, all the best.