I'm turning into a bit of a fan of littleBits. They are a bit like Lego, but for electronics. They are rather hard to get hold of in the UK at the moment but I reckon they are worth the effort. Each of the "bits" has magnetic couplings on it that let you snap it to other bits and pass electrical signals around between them. It is intentionally very simple and works very well.
LittleBits started off making simple circuits which have lights and dials and stuff, but based on the success of those kits they've branched out to make lots of other devices.
While I was in the 'states last year I picked up a Korg synthesizer kit. This is awesome. It lets you make the most amazing sounds. I'm sure there are computer programs you can use to make these kinds of noises, but for me there's nothing like wiring things together and making sounds with them "the hard way". If I was making a space shooter game I'd definitely be using this kit to do all the sound effects. There are even people on the web who have recorded musical pieces using this simple hardware. And some of them are very good.
Because each of the bits is compatible with all the others you can plug the sound generation components together with other sensors in the kits and make things like touch controlled musical instruments.
I've been playing with the bits for a while now (I've even got them talking to Windows Phone). In the next few weeks I'll be putting out some posts that tell you how.