My niece, Meg, really enjoys crafts (as do I). We bought her a friendship bracelet making kit for Christmas that I spend awhile figuring out how to do and then we sat and worked on crafts together (her on her bracelets and me on my knitting).
Our nephew, Nate, got a cool electrical circuit kit that can create over 300 different projects. Uncle Nate and little Nate spent time figuring out a few of the projects...and honestly, I'm not sure who enjoyed it more. Uncle Nate was pretty stoked.
The four Veerman kids in front of the tree (Caleb - 2, Nate - 6, Meg - 8, Kate - 4). This was before my sister and her family arrived.