Lots of kids are collecting beanbag animals now. Think of all the accessories you could craft for them. Beds can be made from shoeboxes, cradles from an old oatmeal canister cut down the center and whole houses from larger boxes. Choose small beads imprinted with letters to create custom collars for each animal. You can make an entire wardrobe with a little felt and some glue.
Once you've found the gifts, extend the fun by teaching your children how to wrap them. Let them pick the gift wrap and ribbon. You can even make a craft project out of it by letting them make their own gift wrap. (It will save money, too!)
Start with a roll of brown craft paper (the kind you wrap packages in to mail) or white butcher paper and some washable paints. Cut the paper just large enough to wrap your package. Then, the fun starts. Most craft stores sell sponges pre-cut into Christmas shapes, or you can make your own designs with the special sheets of dried, compressed sponges. They are about as thick as a sheet of construction paper - and just as easy to cut. Draw a shape, cut it out and dip in a little water. The flat shape immediately swells up into a sponge, ready to paint with. To keep things a little neater, let the sponge dry and then hot glue it to the top of a 35mm film container. The container acts as a handle and keeps your hands out of the paint.
You can get the opposite effect on your wrapping paper by cutting shapes out of cardboard and laying them on your sheets of paper. Then use one of the new misting-type paints (Delta Color Mist) to spray on color - or spatter your paper with toothbrushes dipped in paint. Let dry and remove your stencils. String up a clothesline in the garage and hang all your wrapping paper to dry with clothespins.