Bindeez
My little girl got this Bindeez kit for christmas, they are similar to hama beads except that they are little coloured balls that sit in depressions on the formers instead of beads sitting on pegs and they dissolve in water so no hot iron is needed. This made them much more accessable to younger children like my daughter as she could build the picture up (using the little gun/pencil thing so dexterity was low priority – meaning little toddles could do it with out sending the beads everywhere!). She then used the water spray to spray them and we waited for them to set!
She went on to make a range of things with them, including a coaster for Daddy to put his drinks on at his desk!