Wow- I haven't read every post yet, but...
I had NO idea this was a controversial topic!
For DS's birthday, we put something along the lines of "We'd love your presence, don't worry about a present!".
Last time, I asked that in lieu of a gift, everyone bring a dish-to-pass. We're pretty broke and it was the fact that everyone helped a little with food that actually made it so we could afford a party (we had it at home, but we bought a few balloons and a cake and things). Everyone seemed to find it creative, easy and refreshing. I think that has to do with my friends, though. They understand... and to them, it was nice to see all the kids have such "healthy fun" (their words!) at a party. DS got presents anyway- my DH and I gave him something and close family and friends will as well. We know him, we want to invest the time and money, and just a few meaningful presents are enough. But a big "friend" birthday party doesn't need gifts, in my oppinion.
A few other "theme" ideas:
1.) Art party. You could find a polite and fun way to say that some play-doh, crayons, paper, etc. would be appreciated, then you could make the party an art party by using the gifts by spreading out big paper, easels, etc. and letting everyone create! You could even make a banner to keep by writing "Happy _ Birthday, ___!" and all the art goes underneath.
2.) Cooking party. Ask people to bring a snack to make. With a few kids, you can get them in the kitchen making them then eating them. I bet they'd have a great time!
5.) A pocket party. Suggest that all gifts be able to fit in a pocket- cuts down on clutter, allows for creativity and (most likely) will limit the amount people will spend.
4.) If you're worried about DC not getting presents like the other kids, you could save your present for the party, then the only one that is opened is yours (which, out of all of them, is most likely to be the very thing he/she wants). I don't think anyone has a problem with the idea that parents would give a present, even when others have been politely asked to refrain, it would be the parents' present(s). You could even make it something that they could all play with at the party.
If you want a big party with lots of presents- hey! That's your choice. Personally, I honestly feel like the celebration was a gift in itself, and from previous experience, that the random gifts people brought were appreciated in their guesture, but ended up being clutter and a waste of their money.
If I really believed that everyone would bring a small, meaningful token of affection for a birthday party, then I wouldn't have an issue with presents. And I agree that it is not polite to give a list of gift requirements (and you wouldn't need to if people were sincere and thoughtful and the giver had confidence that their modest gift would be well received) but unfortunately, much of birthday gift giving is about running over to Target to see what is on-sale in the approproate age/sex isle.
And just an aside- there seems to be a dramatic decline in the quality of birthday parties. When I was a kid, a birthday party ment balloons, streamers, the sprinkler on in the back yard or maybe a clown or for something really special, a party at the roller-rink. You know, the playroom, the yard, the park, pin-the-tail-on-the-donkey, a pinata, or a sleepover. Homemade cake, parents milling around, a good game of tag or a swim in the pool. Today, they seem so "commercialized". Chuck-E-Cheese. Go to Walmart and pick a cartoon theme. Order a cake with a cartoon face on it from the grocery store. Sign up at the local "kids place" (whatever that is-a resteraunt, a store, a play-yard) and have them do everything- just you show up- no fuss no muss. Kids go home tanked up on oil and sugar and grimy after being in a "kids place" for 3 hours. I'm not saying every single place that hosts childrens' birthday parties is yucky, I'm just saying what happened to limbo in the back yard and some primary color crepe paper and mom's lopsided cake?