We love pulling ornaments out from storage that we have sentimental attachments to, but we like to add new ones each year, too. This winter wonderland ornament (spotted on Family Fun) has the appeal of a snow globe and terrarium, but is made simpler for children.
We actually have all of the materials needed at home right now - cups leftover from a long-ago baby shower, miniature toys that someone attached to a gift we received last year, polyester batting we bought for those stuffies we've been meaning to make, a tiny mirror salvaged from a makeup case, decorative edge scissors, poster board, glitter and glue because we hoard craft supplies that we rarely use. (Okay, we don't have monofilament to hang it by, but we'll improvise). Even if you're short on these exact supplies, you can probably round up enough things to make a go of it.
If you're not hanging a tree this year, skip that step and put these on a mantel or cluster them together as a centerpiece on your holiday table. Another thought is to put just a miniature tree in them and let each child keep a "Christmas tree" in their room.
The full materials list and instructions can be found at Family Fun.