Kids spend a lot of time fantasizing. Their bedrooms should be where they can give those fantasies expression. 

Putting chalk board on one wall, and providing them with colorful, dustless chalk is one great way to allow them to a location to create. With a digital camera, you can photograph anything they get attached to, and store the file. That way, they will be able to let go and erase the board to make room for new creations. The advantage of this is that you don't end up with tons of paper you must file. A USB device the size of your pinkie finger can hold all the digital files you collect. Saving paper also saves the environment.

Cork board is another good cover for a wall. They can hang any art work they like on the wall, and change their minds every week. The wall isn't damaged every time they feel like redecorating. Provide them with push pins (if they are old enough to use them safely), and scraps of fabric in different colors. They can make the wall look like a patchwork quilt.

Cover a wall with a strip of painted metal sheeting. This becomes the canvas for magnet art. Provide them with flat magnets and blank stickers. They can cover the magnets in the blank stickers, color them with pen or crayon, cut them out, and attach them to the wall. Magnetic alphabets and magnets with single words printed on them, provide a great way to stimulate literacy and poetic inspiration.

If you cover a wall in felt, and provide kids with lots of colored felt pieces, they can cut out characters and settings, and then arrange them to tell stories on the wall. Felt adheres to felt, so no pins are needed. This is a safe option for toddlers.