Hooded towels. I say this because my mom gave these last year to my friend's children (one a butterfly towel, one a puppy) and those kids will NOT have another towel. They love them. The puppy has ears, paws sewn in the seams and a tail. The butterfly has wings in the back. They were purchased, but I'm sure a crafty person could make them!

How about a Cookies In A Jar Mix along w/Cocoa In A Jar Mix.
I have also done the cocoa mixes in individual cone shape plastic bags.You can use the ones @ crafts stores that are used for adding decorative icing.
Add a mini card w/directions to each item you decide you want to make.

I'm making some felt "monsters" for my ex-DIL's two sons, about 5 and 1 1/2 yrs, as I won't leave them out when giving Xmas presents to my grandchildren. Just cut 2 shapes from felt , sew together leaving an opening for stuffing, sew on buttons for eyes (embroider for younger kids), embroider or applique faces, maybe attach feet and arms. Stuff with cotton or beans. If you want to make these larger you could button the opening and use as toy bags.

I like this sack a lot but you may not want to have it with a 2 y/o and a 4 month old around; the cord could be a hazard. I'm sure the older child would love it. Just saying.

The 4 year old - how about G.I. Joes? My kids loved them - their friends also loved them as they seemed to "follow" them home. You could also get a sm box (shoe box size) and put camafloge tape on it for Joe to "sleep" in.
The 2 year old is the tough one 'cause I'm sure he tries to keep up with older brother. Maybe some bigger cars or trucks.

You could also go with puzzles, board games, card games, coloring books...
Boy am I not awake I read sister the first time not sitter!

A gift cert. to a nice resturant would be nice for the mom and dad. Maybe offer to watch her kids for a few hours.

For the baby, I second the bibs idea. There are several free and easy bib patterns online, and you can never have enough bibs.

For the two year old, maybe a stuffed ball? I made my son one when he was two and he really liked it, and still plays with it (he's three now). It's soft, which is nice for playing in the house.
http://blog.burdafashion.com/bumo_en...patchwork-ball

It's english paper piecing, which is hand work. I usually avoid hand work, but it really goes pretty fast and you can do it in bits and pieces when you have time.

For the older boy? Beanbags sound like a good idea. I'm doing that for my 3 year old nephew this christmas. I'm going to package them in an empty coffee can so it can be storage and a toss-the-bag-in-the-can game in one.

Homemade candy - fudge/peanut brittle/divinity etc or homemade cookies you can put them in a tin.

For the 2 yr old you can make a cloth book and put differant sensory things on each page. Glue on or sew on a strip of sandpaper for the rough texture- sew on a square of fake fur for soft etc. This would also work for the baby as he will be growing and will soon be exploring his world.

Or sew a zipper onto one page - a large button and a flap with a button hole to learn to button. Put a snap on one page with the same idea of putting the other half of the snap on a flap. You can get large snaps online or at Joann's. You can sew on shapes - circles squares rectangles etc on one page and sew on velcro. Then cut out a square a circle etc and add the other velcro for a match game.

Another thing I did for day care was to take a poster board and found shoes with differant treads on the bottom. I made an imprint of the shoe tread on the poster board of several differant ones and then the kids had to match the right shoe or boot with the imprint of the tread. You might not want to do shoes but you could find some distinctive toys or items that would work the same way. You could make the poster board more durable by using cloth(make it into a small quilt maybe?) instead and painting the imprints on that.

You can make a cloth book and sew a square of velcro on each page. Then cut out letters or pictures of food or animals and put the other half of the velcro on that. You can glue the pictures onto card stock and laminate them for durability. You can buy laminate plastic at walmart.

For the 4 yr old - you can make a cloth game board for checkers and make checkers out of milk lids. You can sew velcro in the squares and glue the other half onto the milk lids. make sure you have two differant colors of milk lids.
The velcro will give him a way to store the checkers with the board. Or you could make a small bag to store them in.

If you have access to pictures of the family make a matching game by using their pictures. Make 2 identical picture cards of each family member including any pets. If not you could use pictures of toys pictures of food apples oranges etc. You could use pictures of babies as little ones love to look at pictures of babies or puppies etc.=== to make the cards use cardstock to print your pictures onto or glue them onto and then laminate.

Not to be a party pooper but as I worked in day care for quite awhile and had my own daycare I'd like to add a caution on the bean bags. With small children what the bean bags are stuffed with can be a hazzard. Beans or rice or soybeans are a choking hazzard and can also find their way up a nose or in an ear. I would be wary of giving them to this small of children. Just my input for what it's worth.

If you have a JoAnn's close by you could get t-shirts and decorate them, especially for the two older boys. Maybe a onesie for the baby. Decorate with paints or applique. If it is colder where you are maybe get sweatshirts from Walmart instead of t-shirts.

This is so neat I am going to make one for my grandson to put all of his GI Joe and army stuff in. He carrys it everywhere.