External Flash
An external flash can do  more for the quality of your indoor, and outdoor, shots than any other upgrade/accessory. Both Nikon and Canon offer fairly inexpensive but excellent flashes that allow you to bounce the light of the ceiling. The result is bright, evenly lit photos without your subjects looking washed out or getting red-eye.

Canon
Canon Speedlite 270EX Flash for Canon Digital SLR Cameras $140
Canon Speedlite 430EX II Flash for Canon Digital SLR Cameras $260
Nikon
Nikon SB-400 AF Speedlight Flash for Nikon Digital SLR Cameras $120
Nikon SB-600 Speedlight Flash for Nikon Digital SLR Cameras $215
In both cases the more advanced/expensive flash gets you faster recycling times, greater range/power and more detailed control. If you are not likely to be using the flash in professional settings the cheaper of the two will be fine.
Tripod
I already have a post about a wonderful, feature laden tripod for only $40


Accessories
Transcend 8 GB SDHC Class 6 $13 Easy stocking stuffer,stop worrying about running out of room, especially if you have a newer camera that shoots HD video.
Eye-Fi Share Video 4 GB Wi-Fi SDHC $64 This is one of those accessories that makes me feel like I am living in the future. Not only do you get 4GB of space on a standard sized SD card you also get Wi-Fi that lets you wirelessly upload pics as you take them to your computer and/or a handful of photo sharing sites online. One of the best uses of these cards is to hook your computer to your TV, run a slide show of the upload folder and as you are taking pictures of the party/fun they will appear on the TV slideshow – blowing your guests minds!

Waterproof your P&S DicaPac WP110 145X95mm Small Alfa Waterproof Digital Camera Case with Optical Lens (Clear)

Camera Bags
These bags are all sized for camera and a few lenses, enough to get you through the day but not carry all your gear and the kitchen sink.

Messenger style (over the shoulder): Crumpler 6 Million Dollar Home
Sling Style (backpack with one strap): Kata 3N1 or Lowepro SlingShot
Backpack: LowePro FastPack or Think Tank Street Walker
Filters
Another cross post – Filter information and links


Books
For years I have been recommending Bryan Peterson’s Excellent “Understanding Exposure” He now has a second book Bryan Peterson’s “Understanding Photography Field Guide: How to Shoot Great Photographs with Any Camera” that looks to be very helpful
Another book getting rave reviews The Best Camera Is The One That’s With You: iPhone Photography by Chase Jarvis (Voices That Matter)
More Ideas
Cute mode dial decals from Etsy
Photography Charm for bracelet

Pro-membership on Flickr, Smugmug, a photobook of their best images, Gift Cards, something fun from Photojojo.com

I will add more ideas in the coming days!
Leave your thoughts in the comments.

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 Shadow Riders - Now I kinda wish I had photoshopped cowboy hat shadows for each of us! From family adventures in Saguaro National Park, Arizona
 Menzie's Penstemon or as the nerds say - Penstemon davidsonii ;) Found these little purple flowers on the way down from Paradise in Mt Rainier National Park and thought they made a nice foreground to the beautiful and still snowcapped peak in the distance. Captured with the GH5 and 12-35 f/2.8 Lens #lumixloungegh3
 Rainy Day Reflections of Seattle's coolest public library - I almost said coolest building but the new Amazon spheres are crazy cool. I like living in the future - now if we could just ecotopia this place up all would be peachy!


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