I have been heading our children's church for the past year. I have found a lot of craft ideas from crafts books in our church library, especially crafts for puppets and things to do with paper plates. There are also a lot of websites available, including this one. I have used them in teaching my class of preschoolers. The verses are simple enough for them to remember.
Some letters even have multiple verses.
We just completed Road Rally 2000 at our church today. Some of the teachers hung strings of brightly colored or black and white checkered flags in their rooms. For story time we had the kids sit on wood risers - kind of like a grandstand. Also brought in a racing tire, tire iron, racing helmet, engine degreaser etc. Race car shaped popsicles were served one day.