Baking
Pick out several flavors of cake mix and buy enough ingredients for your party guests to make their own cupcakes. A typical cake mix box will be enough for 20-24 cupcakes. Have the children decide on groups and work together so you don't end up with too many extras. Be sure there are enough adults available to supervise as they mix the ingredients, especially if raw egg is involved. Let the children play while you bake the finished products, then serve their masterpieces. They can eat the cupcakes at the party or bring them home as a creative goodie bag idea.
Decorating
Decorating cakes or cupcakes is a fun way to involve kids in the cake-making experience without dealing with too many ingredients. Give each child a plain piece of cake or cupcake and set up a table with bowls of different frosting colors, piping bags with icing and bowls of different types of sprinkles. Let each child decorate his own piece of cake, and watch as they enjoy their creations.
Ice Cream Cake
For those who prefer ice cream over a cake dessert, try making mini ice cream cakes. Buy a selection of ice cream sandwich molds and let the kids choose their favorites. Bake a long thin sheet of cookie dough and use the molds to punch out shapes while the dough is still warm. Remember to make two cookie shapes for each sandwich. Let cool, then place one of the cookie shapes into the mold, top with ice cream, and place the second cookie shape on top. Let the sandwiches solidify in the freezer, then serve for dessert.
Online
For those who don't want to try their hand at real baking, there are plenty of online games that allow kids to make virtual birthday cakes and decorate them as they please. Games4Girls and FunnyGames are options, but there are several available. Once you've set them up with a cake game website you approve of, let them "bake" away and you can sit back and relax, without any mess to clean up.