Oobleck is arguably considered to be the classic small person science experiment. That and the bit where you sprout bean seeds in wet paper towels. However, I think that it Oobleck is not to be discounted just based on its overwhelming popularity. It is much, much too entertaining for that. In fact, I'm pretty sure there is a reason why this stuff has endured so well in houses and science classrooms alike for so very long. If nothing else, it is extremely messy (which kids love) and ridiculously easy to clean up (which adults love). There is also the added benefit of being able to go as far down the path of nerd-dom as one might ever want to with this stuff that is both liquid and solid; oobleck is the perfect introduction to states of matter, non-Newtonian fluids and all that good business. Or, it can just be fun to play with. As evidenced above, Mariam couldn't keep her hands out of the bowl long enough for me to get a picture of the oobleck doing its magic thing as a solid.
1 cup water
1 1/2 to 2 cups cornstarch
Mix the cornstarch into the water a 1/4 cup at a time, taking care to dissolve lumps. When you get up to about 1 1/2 cups of cornstarch added, you might find it easiest to just begin mixing with your hands rather than a spoon or whisk. Add up to 2 cups of cornstarch, stopping when your oobleck comes together into a smooth mixture without left over water sitting on the top.
Although oobleck is essentially just a suspension of cornstarch in water, it originally got its fancy name from a Dr. Seuss classic where a sticky, gooey liquid comes from the sky. It's classic Seuss, part ridiculousness and improbability, part morality tale. A couple of drops of green food coloring or tempera paint added to the basic oobleck recipe should get you a perfect companion substance for the reading of this book.
Another great book that would complement the oobleck making quite nicely is What is the World Made Of? from the Let's Read and Find Out Science Series. It's a clearly written book with a subtle sense of humor and easy to understand descriptions of the states of matter. A perfect choice if you want to get a little more science-like with this experiment and start discussing just how weird it is that oobleck behaves both like a liquid and a solid and crosses the boundaries between states of matter.
Speaking of which, if your kids are old enough to understand the concept of matter in a more detailed way, you might take a look at this great resource on oobleck. The author goes a little more in depth about non-Newtonian fluids, a fancy name for a very cool thing, and also has a video clip of oobleck in action that is extremely weird and fun to watch.
Note: Just make sure that you don't leave your kids unattended with the cornstarch after watching that video or you'll find them dancing around in a bathtub of oobleck before you know it.