Birthdays: How much do you spend on your parties and on gifts for kids’ friends?

My girls go to a handful of birthday parties each year, mostly for cousins, friends at preschool, or kids of our friends or neighbours. Because there aren’t many, I haven’t worried too much about how much to spend, I just pick up something I think the child will like (often based on things that have been big hits in our house).
 
But now that Anna’s in senior kindergarten, she’s getting more invites and I wonder if other families have set a spending limit for gifts for their kids’ friends and classmates. Does it depend on how well you know them? Do you get input from your child on what gift to choose, or do you just get something on your own?
 
While we’re on the topic, Anna’s going to be turning six next month and I’m pondering party ideas. How many of you have had a party at a local play centre or “party place” instead of at home? Has the experience been positive? I started looking into the cost (there are some pretty cool ideas out there) and I’m not sure what I expected, but it’s expensive! I wonder if I tallied up how much the food, decorations, cake, games, etc. cost at home, on top of all our cleaning and prep, if it evens out more than I suspect. 
 
Some of these companies even supply loot bags, which would be heavenly. I have a thing about loot bags. I wish we could all agree to call off the whole loot bag thing, yet I feel like the kids will be disappointed if I take a stand and don’t cough them up. Then I end up totally overspending on them.
 
If you have done parties at home, what are some of the themes that have gone over well? We did a mixed friend/family party last year with a pajama theme and it was a great success — easy for even the adults to participate, and to incorporate into games (pillowcase races) and loot bags (individual boxes of cereal with bowls and spoons). I think I got all my ideas from you here, that's why I'm back for more!

Photo by sweetangeldelights via Flickr