We make a lot of "salzteig" - it's a self-made clay that gets hard as a rock. We use cookie cutters or cut out our own shapes, let them dry and bake them in the oven for about one hour at 300 degrees, then paint them. When you punch a tiny hole at the top of each shape (before baking), you can hang the decorated shapes in the kids' rooms or use as x-mas-tree-decoration. We've made dinosaurs, pigs, owls, butterflies, etc.
Use 1 cup of salt, 2 cups of flour, 1 tsp. oil and add very little water until dough is plyable.
And if you really want to get creative, go to www.creativetoyshop.com
(I know, shameless self-promotion...)