A great craft idea for kids uses old cds.  Beat up, scratched, unusuable cds or the millions you get sent to you free from AOL can be recycled into something beautiful.  First figure out what holiday you want to use it for, or just make it general. 

For Christmas glue cotton balls to the cd.  Leave the center hole open and glue a figure of some sort in that center.  It's actually easier to glue in the figure first and then add the cotton balls. 

To make a hat cover the cd with some sort of fabric.  Add lace to the edge if you want.  Cover a half round piece of a styrofoam ball with the same or different fabric and glue it to the center.  Add a piece of ribbon to one ege to hang it if you want to. 

Cover it with black and add spooky figures to make a Halloween decoration.  Use your imagination and whatever you have around the house.  A piece of shiny aluminum foil glued to the surface makes a great skating pond.  Add skating figures and whatever else you want.  Elmer's glue works fine.