It is very tempting to buy a cheap nylon Halloween costume. After all, they are cheap! And your kid wants to be some licensed character. And, did I mention, they are cheap! So it's easy just to go that route.
Don't do it!
It is so much better to help your child make his own costume. Really, it is. And you don't need a sewing machine. It doesn't have to be perfect. Show your child you value his creativity by encouraging him to put together something using his imagination and resourcefulness. The local thrift store is good for piecing together pirate, princess or storybook character costumes (you'd be amazed what you can put together out of your closet, though). The local art store clerk can help you figure out how to transform a cardboard box into a robot or train. And seriously, just ignore the blogs that have perfectly crafted Homemade Halloween costumes. They can serve as inspiration, but perfection is overrated and just makes you feel inadequate.

Kiddo decided he was going to be a school bus for Halloween. I helped him cut the yellow poster board and put on the straps, but he decided the design (hence the green windows, heart and smiley face), cut it out and put it together himself, with a little help from double stick tape. He is so excited about wearing it for Halloween.
He is certainly much more excited and proud than he would be had I gone to the Ricky's Pop-up Halloween store and picked him out some plastic get-up. And, also, might I say that the reaction from the treat-handing-out-public to homemade costumes is much more enthusiastic that to that of the latest nylon Disney princess costume. Not that your kid shouldn't be a Disney princess, but she can put together her own costume (yes, really)!
I tried to find you some good DIY Halloween costumes sites, but like t
his one, they seem to be mostly Mom-made, which totally misses my point. The costumes should be KID-made.
Happy Halloween, I can't wait to see your costumes.
P.S. (I know this is a long post)
Here was the train costume Kiddo wore the last two years:
See? Totally un-perfect, but he loved it so much he wore it 2 years, and almost again this year.
UPDATE***Just posted today:
Easy Homemade Costumes for Slacker Moms @ Mommy Poppins