I have been collecting tutorials for homemade ornaments. These are all easy enough for the kids to help with. I think this is going to be an annual tradition for us. Last year W and I made cinnamon-applesauce ornaments and handed them out to everyone on our list. (You can see one of the cinnamon hearts in this post.)
* Cinnamon Applesauce "Cookies" (basic recipe, but there are tons of variations on the web)
* Salt Dough Ornaments .. a classic!
* Beeswax or Crayon Wax Dipped Pinecones
* Recycle Toys into Ornaments
* Sparkly Yarn Ornaments
* Vintage Glitter Snowballs (part of a series of 24 Handmade Ornaments, though not are as kid-friendly to make)
* Retro Snowflakes
* Sparkling Ice Crystals
* Borax Crystals
* Mice (made from Hershey kisses!)
* Felt Wrapped Trees
* Not technically an ornament but this (unbreakable) felt garland is perfect for homes with little ones.
* Button Wreath
As if all that wasn't enough for you, here is a list of holiday books with coordinating kids crafts. Most are, you guessed it, ornaments.
Shhhhh! We made these for the Grands last week.