I have those kinds of parents also, lol.
We have done t-shirts w/ the kids footprints on the back,and on the front painted "My grandkids walk all over me"
T-shirts w/ the kids hands as wings of angels
Photo clocks -- buy a piece of finished wood at Walmart in the craft section, they also sell a clock kit for about $5. Print out a picture of the kids, put clear contact paper over it to cover it, then attach the clock kit - we've made a ton of these for assorted grandparents, aunts, uncles, lol
We made a memory jar w/ little hearts that the kids wrote their favorite grandma/grandpa memories in
photo collages (of course)
The kids made and painted a birdhouse for their grandparents
We also made a plaque that the kids helped router out the letters that say "Welcome to Paw-Paw and Gram's" for the front of their house
My dad is Catholic so we got a cross for the front entryway of his home and had it blessed
At jewelry stores (and now wal-mart) you can bring them a picture and they kind of engrave it onto a locket, keychain, etc -- you'll have to go see what I"m talking about b/c it is really neat!
We bought a "Grandma" locket for Gram one year and put the kids pictures in it
We've also given them a "date night" one time -- a basket w/ a blockbuster gift card, microwave popcorn, candy and sodas. And a "grand-kid night" w/ a family DVD and all the other things.
This year we're doing something a little "same old same old" w/ a new twist. We're going to take pictures of the kids in a pose (like on a skateboard, jumping, etc) -- print them out, cut them so it's just the kid in the picture and cover them w/ contact paper (or laminate them) -- then we're going to glue them to wood blocks that are cut in the shape of the child and made a stand -- almost like "paper dolls" or "wooden dolls" -- but since they're all in a shape it's cuter and they can "arrange" them. My parents are as quirky as we are and we thought they'd get a kick out of those.
--S.