Can he select a couple of his books to give her? We have a Go-Green Book Brunch each year and parents/kids bring their used books to pass along to others, rather than have the books sit dusty on shelves or end up in landfills! Everyone leaves happy with a bag of "new" books for their family.
I love the potted plant idea from the first poster. A pot, bag of soil, packets of different seeds and maybe a little pair of gardening gloves!
You could make your own homemade Play-Doh. There are recipes on-line.
My kids love to put together homemade activity books. Do you have a printer and xerox (color helps, too)? We print off activity pages from on-line sites (word search, mazes, dot-to-dot), then add poems, sticker pages, recipes, jokes, homemade Mad-Libs, photographs of whoever the book is for, etc. We bind the pages (use hole-punch and yarn if you don't have a page-binder (Office Depot) . These are a huge hit for car trips or overnights.
Do you knit? Could you knit her a little purse? I don't knit very well at all, but I have made my kids bags using straight knitted rectangles folded over and sewn at a seam, then a knitted strap sewn on.
I love the idea of this party!! I think I may do this for my own kids!! In this economy, we don't need to be spending tons (although I have friends who own our beautiful toy store in town and I still go there to support their business and buy pretty things!)
That said, Geppetto's Toy Box in Oak Park has TONS of lovely hand-made, green, and fair-trade toys!