
I do tend to progress mine to sleeping first with the door open and then to changing to a dog bed as I don't think crates are the most attractive pieces of furniture to have in a home :).
In my case though this might be for several months as the last few puppies I have had have shared a room with an adult dog and I have continued with a crate for the adult dogs peace as well as for housetraining reasons.
All my dogs have maintained a great affection for their crates, though, which is very usefull for travelling when hosts are always pleased to see you arrive with one I think :)
It is always variable when a dog is sufficiently bladder trained to allow more freedom at night and an element of trial and error will probably be necessary. Of course it helps if the puppy is restricted to a washable surface which will take any stress out of the situation and a fairly limited space encourages a greater attempt at "hanging on" than might otherwise be the case. Any accidents should not, of course, lead to any chastisement just a reappraisal of the suitation and perhaps a further spell with the cage shut.