On early bilingualism

Analysing the gradual learning process through which a child becomes bilingual from early infancy, three stages can be distinguished:

(1) the child has one lexical system which includes words from both languages;

(2) the child distinguishes two different lexicons but applies the same syntactic rules to both languages;

(3) the child has two linguistic codes, differentiated both in lexicon and in syntax, but each language is exclusively associated with the person using that language.

Only at the end of this stage, when the tendency to categorize people in terms of their language decreases, can one say that a child is truly bilingual.
(The acquisition and development of language by bilingual children. Virginia Volterra and Traute Taeschner ) http://journals.cambridge.org/action/displayAbstract;jsessionid=89914F99...

(...) Bilingual children's code-mixing is normal and cannot be considered a sign of "confusion" of their two languages. In fact, bilingual children have been shown to differentiate their languages as young as two years of age, and possibly earlier. In terms of developmental milestones, research suggests that there is no outstanding difference between bilinguals and monolinguals, as long as both languages of the bilinguals are taken into account.

( Language development in preschool bilingual children. By Nicoladis, Elena; Genesee, Fred)