If you have a little sewing experience felt books are fun to make and make great gifts for toddlers.  Here are some ideas:

Gifts by Hand http://giftsbyhand.blogspot.com/2008/11/traveling-race-track-book.html has thought of a great racetrack book for the little boy in your life.  It includes 2 tracks and a pocket in the back to hold matchbox cars.  They are available for sale in her etsy shop:  http://www.etsy.com/view_listing.php?listing_id=16929169&ref=em 

She also has a cute doll house book available:  http://www.etsy.com/view_listing.php?ref=vl_other_2&listing_id=17101208

Martha Stewart has some great directions for a felt book here:  http://www.marthastewart.com/good-things/quiet-book?autonomy_kw=felt%20book&rsc=header_2

I bought this pattern and am having fun putting a book together:  http://www.keepsakequilting.com/productdetail/2927.htm  It is fun and not too difficult, but very time consuming!  It's a great way to use up scraps and shows how to mix fun cotton prints with the felt.

Check out this link to see what other creative people have done. http://www.etsy.com/search_results.php?search_type=tag_title&search_query=quiet+book