Here's what we did:
8 weeks to 6 months:
When we went out, we left Tails in the hallway. It's quite long and in there he had his bed at one end, toys and cushions in the middle and two puppy toilet pads at the other end (we live in an apartment and pad training worked great for us too.. and the progression from pads to outside just happened naturally -ie. as soon as Tails found that he could hold it a bit longer he decided that he just preferred to go outside).
6 months til now (10 months): Now he probably would be fine with the run of the flat when we are out, but just to be safe we shut the living room and my work studio.. so he has the hallway, the kitchen and the bedroom. I know he likes to lie on the bed and we leave toys in the hallway and water/treatball in the kitchen. Lily and I work from home so we're not usually out that much anyway.. if its more than 5 hours we send Tails to the dog man. He would probably be fine for longer than 5 hours but I just think its gotta get boring... after all dogs can't browse the internet or watch TV. We leave audio lectures on the Bible or Rabinic Hebrew playing when we're out.. or sometimes a bit of bluegrass.
We did a very gradual release for Oscar too. As a puppy he had was fenced in with his crate attached to the little area we cornered off for him in the kitchen. Then we gradually removed the little fence area and let him in the kitchen. Then it was leave the kitchen door open and let him have access to the hallway. He did a poo and wee on the first day of letting him into the hallway and we thought we have made a mistake giving him so much freedom. But we stuck to it and it never happened again. Even now, 7 years on Oscar and Bella do no get free roam of the house - they have the living room and the bedroom and that is all so that is all they expect, but we like to give them choice so they can look out the window and watch the world go by or stretch out upstairs. And yes...for the first 6 months Oscar was not allowed anywhere near the bed....but ...when those eyes look at you....and the rest is history.
I will include a picture, maybe this set up can help you.
I absolutely love the crate attached to the gate idea! I do leave Bosco in a similar x-pen when I go to work. He's a chewer and heaven know what he could ingest while I was working. I know he is safe, has water, and chew toys. My guess is that he sleeps the bulk of the day. He's a happy boy all the time, so I'm guessing that spending his day in the pen is not hurting him in any way -- but rather is keeping him safe and out of trouble.
I love this pen too...the older she gets the more I'm eyeing that picture of the pen! She definitely needs this. She goes to daycare now on any day where she will have to be in her crate longer than 4 out of 24 hours. She loves it!
By the way, Lady could give a rats patootie about the deer antler I bought her. I wish she liked it. It's long-lasting and not $4.99 every few days for a bully stick!
We just started letting Sonny have free roam of the house about a month ago when he was 15 months old. ( I don't think he would have been ready before this). We started at an hour at a time and he did great. We now leave him when we are both gone, but never for longer than 4 hours. We haven't had any problems so far and he is SOOOOOOOO much more relaxed now that he isn't in his crate for periods of time. Don't get me wrong Sonny has always done really well with his crate and still puts himself in there when he is tired, but I think being cooped up in it for hours at a time was tough for him.