Over at the Giver's Log they share their inside secret for this simple creation, using soap bought right off the shelf. Look for soap bottles that have little packaging or labels that can be removed. You can clean any residual adhesive off with goo-gone or you favorite degreaser.
All you need to do to get started is download the free frames template they've so graciously shared with us (if you'd like to use it). Next, turn your kids loose with a "real" ballpoint pen and let them draw a picture on a separate piece of paper. The next part requires a quick trip to your local Kinkos or local print shop to have a transparency made of the graphics which can then be slid inside the bottle.
Check out the Giver's Log for all the details on which types of pens work best, when to add color and how to make your images fit in the frame!