The Quadrilla marble run is one of those toys you imagine preserving for your grandchildren and they will all beg to come to your house so they can play with it. It's a little more expensive than other marble runs but the pieces are all wood and each color of block processes the marble a different way so the kids have a lot of fun experimenting with different set ups. I posted a picture of the basic set and there are tons of other sets and individual pieces you can add to your collection.
We also love geotrax. Again, you can buy a basic set and then add more and more pieces as you go. Our setup can fill up our whole living room now, and the kids (and dad) like making it wind around and under furniture. This train set is cheaper than the wooden ones (it's plastic). It's great because it's really sturdy, and pieces are easy for little hands to snap together. It has remote control engines and lots of little stations for loading things into the cars in various clever ways. Board games are always good -- we like Stratego, Monopoly Jr. (the kids call it "Mini Monopoly") Carriboo (made by the same people who made Cranium), and the old classic, Sorry.

We don't actually have this, but look how cute it is! Vivian is always following me around with a squeege or a feather duster, so I'm thinking about getting her something like this and who knows -- I may end up with a slightly cleaner house! (I suppose I can also just recommend feather dusters and squeeges for Christmas fun).
Sports equipment and books are also big hits in our house. I'll post some of our favorite books soon. We will be moving (just a few blocks up the hill) starting tomorrow, so I won't be around much for a few days. Happy shopping, and please suggest your favorite toys!