I go to the nearest builder's merchant and get a giant roll of their thinnest lining paper (usually about £2, lasts forever). It isn't very thin, so does need wrestling around oddly-shaped presents, but it's dead cheap and recyclable, as no foil, etc. (There are different thicknesses of lining paper, so do get the thinnest you can - it's usually marked on the end of the roll.)
We usually wrap the presents first in the plain paper (it comes as off-white) then decorate. Paint and felt-tips are tricky, as it might bleed through even this thick paper, but stamping, crayons (only time we ever use crayons for anything!), pencils, etc. Often we write the recipients name HUGE and decorate in and around that. Or stamping with snowflakes, stars, etc, then ribbon on top.
The nice thing about this is that it's fun, it's personalised, it looks great (usually...) and you always have the right paper for the occasion!