Also try getting them to do some painting with cotton swabs. These are puzzles that have the little knob sticking out of each puzzle piece. This allows them to garner more control over their finger movement. Children will get some great fine motor skill exercise out of Playdough especially if you add some extra equipment such as rollers and cookie cutters. Bring out the scissors and some old magazines and let them get to work.
Cutting requires a lot of coordination.
For younger children who are just getting used to manipulating scissors, you can buy them without any metal. They are sharp enough to cut through paper but not much else. Buy some beads to thread or use some colored pasta and string. This activity requires a lot of control and a steady hand. Perfect practice for fine motor development.