Recently, my daughter and I put together a pretty cool birthday present for one of the cousins (if we do say so ourselves). We thought of it for her specifically, because both of her grandparents are artists, (her "Pa" is Richard Wallich). But I think it would be good for most kids. It's a fun, and easy gift and I thought I would share it here as I was inspired to pass along this information by Mundane Super Hero who was asking for suggestions for just such things.
Basically, it's whatever craft supplies you find at the store (we got markers, paints and a big pad of paper) along with the book, I Ain't Gonna Paint No More, by Karen Beaumont and illustrated by David Catrow. It's a book about a little guy that paints all over his house and gets his paints taken away from him. Eventually, he swipes back the paints and uses his own body as a canvas. One of my favorite pages is at the beginning... all the walls and floor and even the family pet is covered in paint, but there is a nice, white, spankin' clean piece of paper on the easel. So cute. And so funny.
Also, Joey and I wrapped all the pieces individually with recycled craft paper that we decorated ourselves with markers. We would have used paints, but we didn't have the time for them to dry.
I only have one suggestion about this present... give it to kids over 5 years old or so and even then, only to relatively well-behaved ones. It would really suck to get blamed when the birthday boy or girl decides to decorate their own room with paint.
But that's a call you'll have to make.