Super Mario Keychain/Backpack Fobs

There are lots of things you can do with a pixelated image: sew blocks for a quilt, knit, crochet, or cross-stitch the image, make tiled mosaics... but one activity that will keep little kids busy for literally hours is to make key chain fobs out of Perler beads. Perler beads, available wherever kids' crafts are sold (Michael's, Walmart, etc.), are little coloured beads that you arrange on a special pegged frame (the kid's job), then fuse together with a clothing iron (the adult's job).

Instructions for making these are all over the web, but you'll have to hunt for the images and divide them up on a grid yourself (some charts here).