Kids’ Digital Camera
Anything from the Fisher Price Kid Tough camera for preschoolers to Vtech’s new Kidzoom Plus, which is actually 2 megapixels. You could also consider, for an older child, a shockproof camera like that Panasonic Lumix DMC-TS1.
More Info: Vtech’s new Kidzoom Plus

MP3 player
If you’ve got an older child, an iPod Touch is a great choice because it offers the ability to play music, watch videos, and play games – it’s a complete entertainment device!
More Info: iPod Touch

Nintendo DSi
Every kid is going to be asking for the Nintendo DSi this year. This is a great portable gaming system with two screens, built-in WiFi, two cameras, and a great library of fun games.
CNET Review
More Info: Nintendo DSi

Digital Blue’s LEGO Alarm Clock Radio
We’ve been waiting for Lego to start releasing its first electronics devices; and they’re finally out. The alarm clock radio is nice, and the 3-megapixel digital camera is classic Lego style. Plus, Lego has an amazing Website with tons of great games and projects.
More Info: Digital Blue’s LEGO Alarm Clock Radio

Cell Phone
It’s a good bet your 10-and-older child is either wanting or ready for a cell phone. Consider an inexpensive pre-paid phone like this LG LX 160:
More Info: LG LX 160

Alternatively, if you’re signing up for a family plan, you might be able to get a simple, free phone and limit what kinds of messaging and data options are available.