Sturdy cardboard boxes - I used 2 cleaned and dried 1/2 gallon milk containers and doubled them (i'll show you how below) and some sturdy larger boxes from products from Costco, like the Goldfish cracker box and the 4lbs of raisins outer box. I figure they have to be able to withstand the sitting and standing from my 24ish lb toddlers to not be immediately crushed and worthless for stacking.
Sharp knife if using 1/2 gallon milk containers
Colored tape - I used Scotch Decorative Packing Tape and colored Duck brand duct tape
Scissors (if decorating without the kids)
So basically you tape up the boxes and decorate with tape. Pretty simple. In order to make a more sturdy 1/2 gallon box, cut the spout portion off the tops of your milk jugs with a sharp knife and insert one box into the other. Push together until you have one box completely inside the other. Then decorate as you see fit.
I decorated a couple of the boxes while the kids were sleeping. I tried to make nice straight diagonal lines and found that the packing tape is very see-through and some of the colored duct tapes are also kinda see-through. But who really cares? I also let the kids decorate some of the boxes. Well, they tried anyways. They mostly just got tape stuck to their hands.
The duck brand duct tape doesn't rip as nicely as regular silver duct tape, so the edges aren't very clean (and i didn't want to have any sort of scissors with the kids..)
My kids love to stack and as a bonus the colorful rings of duct tape are fun for stacking AND fun for wearing as bracelets...