We have a tradition at our house. Every 4th of July we have the kids do a craft. It keeps them busy, they get to create something fun to celebrate the day, and its an activity we all do together. Past crafts have included tie-dying t-shirts, painting t-shirts with stars and stripes using fabric paints, making banners to hang on the swing set, coloring sheets,...well, you get the idea.
There are lots of great places to get ideas. One of my favorites is Family Fun magazine. Their website also has tons of great ideas for many holidays.
Happy 4th of July, everyone!