It's as easy as ABC to plan a party using the initial of the birthday child. Kids can cut out and decorate card-stock letters for invitations. Rubber-stamp a border on a paper tablecloth and hang card-stock initials like streamers (print out letters from your computer to trace). Monogrammed cookies adorn cupcakes. Create "name-brand" drinks by coloring in a stencil on patterned paper in marker (affix with double-sided tape).
Use your guests' initials, too: Stencils mark each kid's favor; inside the boxes are rubber stamps and stationery. You'll need a white box (available at crafts stores) and paper stencils (sold in hardware stores). Cut a piece of construction paper slightly smaller than the lid; affix the paper and stencil to lid with a glue stick. Fill the box with note cards and envelopes, rubber stamps, and gummy letters. Secure the lid with colored rubber bands.
We also put guests' initials on T-shirts using iron-on transfer paper for ink-jet printers; follow the package instructions.