I think for me it was a wooden CD holder that my youngest nieces and nephews decorated with their teeny hand and footprints, and then my sis-in-law put pictures of me and the kids in different shapes all over. It's hard to describe, but it turned out beautifully. The kids are all teenagers now, but it's still one of my favorite things.
My best handmade item was when my niece made a poster card for me and I think she was around 6 yrs. old and I still have it to this day and she has to be about 30 at this time. It was frosty the snowman and a Christmas tree with reindeers running around it. Just beautiful I think.
My grandparents made me a leather bible case. It was a very thoughtful gift, even though I don't use it anymore. I really love homemade gifts because of their personal touch.