So........I found these great black frames (with white mats) for THREE dollars each at Walmart (yes, they're cheap, but they aren't being moved around a lot (at all) and they have stood up very well, actually!) and went to town.
First, I had my then almost 2-year-old help with some fingerpainting - I did the letters, and she helped decorate around them.
Then, I let them dry completely. (Took about two hours - did this during naptime.) When they were dry, I framed them in the bargain frames.
Next, I did the ribbons to hang the frames. Warning: if you have a black doesn't ever go with brown pet-peeve, just stop reading now. My walls are a nice deep brown. Since my frame was black, I used a darker brown ribbon to hang the frames because
Then, since I can never get a straight line EVER, and I didn't have another adult around to help - I decided to stagger the letters. I think it worked.
I also took a picture of my kids in their hooded bath towels after a bath one night and framed it. I used a small easel that wasn't being used to hold the picture.
My kids love seeing their art and a picture of themselves in the room, which (I think) is worth so much more than a bowl of guest soaps.