E.C.
I like using sweatshirts and sweatpants as the basis of a simple costume because they're cozy for the kids and you can use them for more than just a one-night halloween thing. Some easy things to do with sweats:
Kitty Cat - get hooded sweat shirt and matching sweat pants. Cut triangular ears out of felt (cut a slightly smaller triangles out of pink felt for the insides of the ears) and stitch them to the hood of the sweatshirt. Use face paint for whiskers. Use an old sock for a tail (I just duct-taped the tail on!) My DD even carried a little beanie baby mouse in her pocket.
Thing 1/Thing 2 (I have twins, this was their 2YO costume) - get red sweatshirts and pants. Cut white felt circles and write "Thing 1" and "Thing 2" with sharpie markers and attach to sweatshirts (yes, you can just use duct-tape loops if you don't have time to sew). I didn't even bother trying to duplicate the fluffy blue hair - folks thought the kids looked so cute in the sweats it didn't matter.
Have fun!