Here are some links I have to share with you right now for ideas from across the web!
Not Made in China - a blog post that has some great links on ideas/instructions/etc. I do believe some of these ideas will end up on my list!
Handmade Toys - an article from Mothering Magazine that is just a nice read and has a few ideas at the end of it!
Flannel board instructions - hey, these look easy enough to follow and I enjoyed having a flannel board when I was a little one!
Instructables.com - a collection of how-to's that you can look through - there are all sorts of ideas there! (Some of them even have links to etsy stores if you don't want to make the things yourself - which I just might have to utilize for some of my gifts!)
Tummy Time Blanket - hey, this is a great idea to use even when it's not Christmas!
Jacob's Ladder - I see this still being sold in stores, but here are the (free!) directions to make it yourself. I'm not good with wood myself but I think even I could make this.
You Can Make This! - a website to purchase patterns that are ready for immediate down-loading!
Doll Clothes Patterns - these clothes would be lovely for a little one who really is into playing with dolls!
I will expand this list as I find, or as you share, more great ideas!
Don't forget, this list is also over at TheMotherhood.net group I started as well =)