I have a 6 yr old and an 8 yr old (and a7 yr old niece) and they all LOVE Polly POckets - all types. The like the small kind, the kind with "real" (HA!) hair, the magnetic kind...they range from $4-$30 for a doll and some clothes and stuff. You can get a decent set with a treehouse or house or beach set for around $9 at Target or Wal-Mart. I found a lot of the $20 sets on clearance at Toys R Us for $9 too.
Also, I VERY highly recommend the Cranium Games, especially Cadoo and Conga which are for the 7 and up age range - though we played with younger kids in teams with an adult reading. I just bought a few to stock up for bday and xmas gifts, they are on sale this week for $12 each at Target, they are normally around $20. I swear I buy a cranium game for every birthday party my girls are invited to <img src="/images/graemlins/smile.gif" alt="" />
Meg