I’m in love with Carol Barton’s book The Pocket Paper Engineer, a step-by-step guide to designing and executing pop-up effects with paper. Most of the examples focus on grown-up uses for popups — effective presentations and so on — but it’s really easy to see how you could use this with kids (or friends) to make wicked-cool art. The book carefully guides you through progressively more ambitious popups, in a clear and easy-to-follow style with tons of illustrations and examples. The author promises more volumes with even more advanced techniques.
Update: Collapsibletank sez, “I wondered if you’d be interested in the pop-up Goatse I made recently…? (Safe For Work, and roundly non-distressing).”