Learn to make these cute collages here. The link includes templates for the owl and the elephant, but you don't really have to use a template... the possibilities are endless with a little imagination!
Chalkboard paint is a great way to incorporate your children in creating their own masterpieces for the wall.
I love the idea of framing pages from classic children's stories:
You can also try making your own letters from scrap booking paper and cardboard or heavy card stock:
DIY instructions for this found here.