My DD is still nursery-age, but I tend to get things that look about £10, but actually buy them in sales IYSWIM, so I actually tend to spend about £5-7.
If I see a good book remaindered in The Works, say, or a good book set in The Book People, I pick up a few to use as gifts, normally putting something else with them (pretty hair clips, crayons, etc.) so that the present costs me under a fiver but is still nice. When I see something good in the sales I stock up - last January I got some great half-price hair things for little girls in the John Lewis sale, and some great kids gardening sets reduced from £7 to £2 at Dotcomgiftshop - I'll put the hair things with a couple of books, and add some seeds and a little pot to the garden things and job done. I've also picked up great things in the ELC half price toy sales in the past - bubble makers, garden toys, craft sets and jigsaws half price for around a fiver.
I hope that these have gone down okay in the past - surely parents can't object to a book (which would be about £6-7 at RRP), plus a crafty thing or pretty set of matching hair things? If their DC have the book already they can always regift it (which is what I do too). I tend to think that a cheap but genuinely nice thing is the way to go. The last party that DD went to I gave a fuzzy felt set (£4 reduced from £8 in the M&S sale, but really cute, I had originally bought it for DD), plus some cute hair clips.
Most of my friends seem to do the same - a book plus something else or an inexpensive crafty set for less than £10.
I buy in loads of multicoloured Kraft wrap from Tiger and get a box of nice birthday cards from The Book People for the year, and that's me done for cards and wrap for a while.