If you're at all handy, you can create amazing cardboard sculpture with Mr. McGroovy's Box Rivets. My husband made this pair of robots for Ronan's birthday party. We then let the kids go to town with washable paint and brushes.
If you want to see something truly amazing, check out the castles. Maybe for Bea's third birthday?? He also has advice about where to get boxes for free.
No -- at least I hope it isn't! Instead of buying whatever lead-tainted, plastic stuff that's available at TRU or Target, I'm advocating a more thoughtful use of your toy dollar. I try to find things that are a little more open-ended; a little off the beaten path.
For the record, we do have plastic, battery-operated character toys in our house. I've even bought a few myself. So I'm not judging. I just want to share my fabulous finds!