Radica's 20Q is among the most amazing and enjoyable gadgets I've come across in quite a while. A handheld version of the website 20q.net (try q.20q.net if you have trouble getting online), this little doodad will ask you 20 questions to narrow down what you're thinking of (if its first guess is wrong it will ask another five questions and take a final stab at it). You can answer yes, no, sometimes, or unknown, and it pays to go with your first reaction to the question (Can it be used for recreation? No ... well I guess somebody could, but not usually and they really oughtn't ... so is that sometimes or unknown? Hmmmm). Its success rate is astounding. It's not hard to baffle it if you pick something totally obscure, but I've found it's more fun to lose to the machine than to win. Among the disparate things it's beat me on are: birthday cake, pirate, badger, oven, buffalo, carrot, fan, lion, key and flashlight.
I gave several as gifts before I picked up one for myself (you can only play with one in the store for so long before the clerks start glaring at you), and I expect Santa will be giving away a few this December. My 4-year-old son enjoys playing with 20Q, too - I read off the questions and help him think through the answers (he knew a lion was dangerous right off, we had to discuss whether they're brown or yellow).
My only complaint is that the animated "trash talking" gets old fast and there's no way to turn it off. The many pros of 20Q, however, far outweigh this minor con. The small buttons might be a problem for some people. You can control how fast the text scrolls across the screen (your only defense against the trash talking is to make it go by faster). Colors I've seen it available in are dark blue, red and orange; the plastic is transparent, so you can see the electronic brain inside (not that there are any flashing lights or electrical arcs to make it interesting).
If you're looking for a great gift for yourself or someone else, you can't go wrong with 20Q.