We have a lot of toys in our house. Our kids are guinea pigs for the preschool and they also have grandparents who keep us well-stocked. Some toys are bigger hits than others but one that always stays in heavy rotation is the bucket of fuse beads. If you don't know, fuse beads are colored beads that you place on a little pegboard to make a pattern. Then you can iron the beads to fuse them together and make your work permanent. Someone has a cool photoset at flickr of several fuse bead projects.
Anyway, I've noticed that working with these beads, besides being really fun, helps the kids with fine motor skills and concentration. T and R do solo projects as well as working together sometimes and like all the best toys, these beads offer enough opportunity for creativity to be fun for grown-ups too.
Here is a work in progress. The template is actually for a car but T has turned it upside down and is making a frog.
The biggest fuse beads brand seems to be Perler Beads and here is a sampling of what amazon offers. Happy fuse beading!