Amy at Living Locurto came up with these great ruffle and flower embellished bags.
Truly it's projects like these that keep me hoarding fabric scraps. Plus, the plain bags are so affordable. You can get 13 for under $3.00 with coupon at most craft stores. That's less than a roll of wrapping paper. Check out all of her designs here.
If you are more into the paper arts or just have a bunch of paper left over from your last holiday project, there are some really cute bags here.
Here is another great idea to help get the kids involved.
Make your Own Gift Bagstutorial for how to make your own gift bags from junk mail from Junk Mail gems. The kids would probably love some made from all of those holiday toy ads.
Here are a few santa inspired bags:
Here are a few reindeer and snowman bags.