If our child's birthday is on a a day that is not the same day that the party is being hosted we let them choose what they want for dinner and I make their favorite homemade dessert.
On party day we typically have a group of 10 - 12 kids. We open gifts and have a store bought birthday cake. We have had parties at home, the local city swim park on the lake, Chuck-E-Cheese, an amusement park, movie theater, athletic club pool, etc..
When our daughter got old enough to understand the concept of money we started making her choose, big gift/little party or big party/little gift.
The little parties are the ones held at home where we make homemade pizza, watch movies, play games, and have a slumber party or we go to the swim park (no fees or price per person) where the kids can swim and play lawn games. Personally I have enjoyed the 'little' parties the most and think the kids have too.
Our daughter will be turning 15 this year and is planning to take the driver's exam for her learner's permit on her birthday. I can't believe she will be old enough to drive.
My son will be turning 6 in April and we are going to do a Mad Science party at home. He LOVES science.
When my son gets to the age where he will want expensive gifts we'll start making him choose big party/little gift or little party/big gift too.