I'm making sets of these for each set of Grandparents (three - since I have step parents). They're a very, very simple craft to make and are super cheap to make as well.
The coasters can be purchased at Home Depot, Lowe's or your favorite home improvement store. They're actually white tiles and are about 16 cents each. Luckily, I had an entire box of them just sitting in the garage. After buying some mod podge, I went in search of some pictures! I already had developed a number of pictures from our cruise, so these will make great gifts for mil/fil. So, I found a paint brush (we have these in abundance around our house) and a few paper bags (I have no idea why I had these, but I was thankful to find them when I was looking for paint brushes. I'm fortunate to have a paper cutter, so it was really easy to cut a straight line, but if you don't have one don't worry, scissors will work just fine. :)
So, I set myself some room on the dining room table and set to work. You can see my set up here:
Each coat takes about 15 minutes to dry, so I did them one at a time. I'd cut a picture and then glue it on the tile. Then, I'd cut another picture and glue it. After a few of these, I was ready to start my first coat. So, I just cycled through like this. All told, I spent less than an hour on 11 of them (I ran out of room on my paper bags!). After they finish drying, I'll glue some felt to the bottom so that they don't scratch the surface of anything that they set on. You can buy felt at any fabric store for fairly cheap, but I recommend looking in the remnant bins at JoAnn's as anything less than a yard is half price (at least at my local store). Because I won't be using a ton, this is a good solution.
Don't think I thought this up myself, I found this on a message board - (www.sewingmommas.com ). A woman there had made them - she didn't give a ton of details, but the mod podge, felt and small tiles was enough information for me. :)