I display mine mostly by line. I try to limit my collecting to a number of distinct collections which is how they're displayed; Masterpiece (which are also separated by faction), CHUG (by faction for '84/85 represented characters then a shelf of 86 characters), G1, WSTs, Legend Class representations of G1 characters, Movieverse Legends (includes Legends and Cyberverse), Kreons and Robot Heroes are each displayed by faction.

I then have a collection of matching line and size class Optimuses and Starscreams so guess they're displayed by character.