A quick search and I couldn't find anything on OzB about kids birthday parties, for something that can easily get quite expensive (average price for the options in an article in my local paper was about $35-40 a head), I am surprised there has not been more talk of budget-friendly options on here.
The main reason I was going to post was that I am after idea's for my daughters upcoming 8th birthday, some additional info is that her previous one at 5 was at Mcdonalds (you don't find easier or cheaper), she is pretty active and more tomboyish that girly girl.
It might be good though if you have got any good idea's in general that you post them up anyway so everyone can benefit.
So I will kick off with a few things that I have found,
Mcdonalds Parties, probably best suited to about 5ish yr olds, but it's as cheap and as easy as it comes, we have done more traditional parties at home and they still worked out more expensive and a whole lot more effort.
Kmart is great for decorations, they have a pretty good range at quite cheap prices.
Parties in a local park are a pretty good option, choose one with some decent play equipment and there is half of your entertainment covered.
Probably the best party so far was another of my daughters recent 10th birthday, it was a high tea style party in a rotunda at a local park with an "Amazing Race" inspired activity which took about 40 mins to complete, involved getting a clue, then they had to find the hidden challenge (small jigsaw puzzle, Pictionary type draw and guess etc) and it went down really well.