As a child, I remember loving getting gifts at Christmas--but loving to give them also. My parents handled this various ways over the years--taking us shopping with them, giving money to be used for family gifts (we weren't really an allowance family), letting us choose among gifts they had already bought. We also made things some years and spent our own money as we got older and had jobs. I can still remember the excitement of seeing family members open things that I had chosen and wrapped for them (actually, still enjoy it today.)
It seems many families are giving up the adult gift exchange and just giving to the children--and realized that my siblings who have kids don't really encourage their children giving like my parents did. I had been feeling for a few years that the "shower gifts on the kids" approach felt a little odd, and finally figured out what was different from when I was growing up.
I'm curious about what other families do around children and gift-giving.