I like to use the thick butcher-like paper that comes in packages to reuse as wrapping paper. It's thick enough to draw or paint on without ripping and thin enough to fold nicely around a gift. For a 2-year-old's birthday party, the boys painted together on this giant sheet saved from packages recently received. Yes, that's a gun.
Aleks was very upset when Bastian painted over his fancy guys. I missed what they looked like originally, but the dozens of arms looked really neat.
Aleks got purple paint on his I <3 Heavy Metal shirt, which he loves, but it seemed to blend in well with the design and other assorted stains. He is very intent when he arts.