My dd is making this poncho for herself using a fairly bulky yarn on large needles. It would be really easy to convert to kid size and crochet it seems (I don't crochet, but it is really just a giant rectangle...)
http://www.knitty.com/ISSUEfall03/PATTponcho.html
My dd altered it a bit for herself and instead of using a contrasting color in the body of the poncho she is using all black and then is going to knit a couple rows of a purple eyelash around it for trim when it is done. I am sure there are a million ways to make it perfect for a smaller child.
This one is a little more advanced, but nothing too extreme. It is made with super chunky and on adults is a small poncho but would fit a kid almost perfectly full size, lol.
http://www.knitty.com/ISSUEwinter02/PATTacapella.html