We picked up this idea a while back and it's a hit. Cut out some contact paper, put it up on the wall sticky side out, and let your littlest artists go to work.
We cut out all kinds of items from catalogs and magazines and have them ready for a day when there's not a lot going on. It's a great way to recycle catalogs and it's fun for our daughter to identify the items as she puts them on the collage. We use clear contact paper because it makes it seem as though they're magically sticking to our walls.
When the collage is full, we rotate them above her changing table so there's always something new to look at.
If you really liked how a collage turned out, you could always seal it up with another sheet of clear and frame it for a grandparent or someone else special. This is a great activity for babies 13 months and up.