"Thanks, but I don't think I have room for this right now. I'll let you know if I need it."
This. Or a "Oh- thanks. i'm not sure yet what I'll need, so can I get back to you if I think I could use it?".
ANything like that! We lived in a very small house when DS was born and I absolutley had to say "no" to some stuff.
AND, personally, I have no problem w/ taking stuff that was loaned - it meant *I* didn't have to worry about getting rid of it, I could just give it back. :) We borrowed a swing, for example, that DS never took to - so after a few weeks, we just gave it back.