This project from Family Fun was a recent success. It is a hanging tray bird feeder. You really do not even need detailed directions to make it. Basically, you make a square out of strips of wood (we used reclaimed wood from our stash) and then using upholstery tacks, attach a screen on the bottom. You can drill holes to make the hanger or even tie the strings to the wood before attaching the screening. It it pretty simple and turned out great.
I found this book in my brother's old stuff and it looks promising. It offers guidance on tool selection and use, as well as setting up the workshop. There are projects of varying difficulty, from making a block set out of one piece of wood to building a real raft! I love that the projects are all illustrated using real working kids and rely on non-power tools.
How do you wood work with your kids? I would love more resources and tips.