H.L.
Bright colors will allow them to grow up in the room and make it nice for an office too. Make one wall a focal wall in a different color than the other three. I've even painted the ceiling the same color as the 3 walls. Decals are available on Etsy.com as well as Target (look by the lightbulbs). Or, paint dots (trace a plate, use 2 different sizes, with a pencil, then paint it in) or stripes (use masking tape) on the focal wall. Dots and stripes also look good together, ie. do the opposite design on the curtains. Add colorful organizers you either paint yourself or purchase.
One must have is a table and chairs (4 different colors is fun) where they can do crafts, homework, etc. A lounging area with large pillows with a bookshelf is nice too.
If you are handy, you may want to spend some time here at Ana White's Knock-off Wood:
http://ana-white.com/2010/08/behind-closet-doors.html