We recently had a Sesame Street party for Scarlett's birthday and the biggest hit of the day was the grow your own monster station. I think part of the reason it was so fun is that kids love to play with dirt but the older kids were also excited to watch it grow when they get home.
I decorated the front of clear, plastic drinking cups with Elmo and Cookie Monsters faces, which I laminated first so when they get watered they wont get destroyed. You can put the face of just about anyone on the front, just print it out on the computer and laminate it. You kids could even watch green grass grow out of their own head.
Then the kids filled the cups with potting soil and grass seed. Bonus: We did it on our lawn so that when seed spilled it would reseed some of our dry looking patches.