Do you have any suggestions for what to get my niece and nephews for Christmas that doesn't involve me blowing a fortune and feeding the frenzy?

My husband and I are very frugal people and try to live a simple life. Our ten month old doesn't have a ton of toys...most of them were gifts or yard sale finds, but they can all fit into 2 little wicker baskets we have in his bookcase. We don't want to get into the habit of making "things" the focus of Christmas, so I think that we are just getting him a balloon and a xylophone this year. That's the easy part.

My brother-in-law and his wife, however, are the exact opposite of us. They smother their kids with every possible gadget and toy imaginable and spend WAAAY above their means, the whole year but especially at Christmas.

Last year, I got them each a shirt that was $5 on sale because that was what our budget allowed us. The gift was opened and thrown aside in less than 2 seconds and the next gift was being torn into. I know that for a kid, a shirt isn't fabulous, and we want to make them happy, but we will not overspend on them just to give "awesome" gifts like their parents lavish on us.

What can I do? I am sure that the parents don't like that "we spent x on them and they only probably spent y on us." We tell them that we try to not overspend and they say that it is okay, but then they make little comments and their body language says otherwise.

I was thinking that I could take the kids out to do something fun, but I need some ideas. I asked the parents to please don't buy for my husband and I and we would just buy for the kids this year, but they said that that takes all of the fun out of Christmas. Any ideas for how to get by on the cheap without looking cheap would be much appreciated.

Thanks,
Katie