I was 7 when my brother was born. My mom gave me an anatomically correct life size infant doll. I mothered that thing to death!
(Well, actually not to death, as she's still here with us.. in fact, she's helping us learn how to diaper right now!
I also got books on the new baby... I'd be careful about those "annoying baby" books, because it might backfire. I only remember reading once book about the new baby coming, and it was about an older sister who was jealous of her new brother... and I think it set a bad example for me of what a sibling relationship was... I wish I had read a book about how wonderful and happy it was that a new baby was coming, rather than how jealous you're supposed to be. I really felt like that, and other comments I recieved from people hurt my relationship with my brother. Just something to watch for.
I really like AAK's ideas for sibling preparation. I'll have to remember them for when I have my second.