The creators of Sugru, a soft-silicone rubber "that moulds and sets permanently," have published exhaustive instructions on how to fool-proof your camera, hence the Sugru Camera.
While you could always buy your own prebuilt point-and-shooter, the Sugru Camera is a term applicable to just about any reinforced device. Simply apply the soft-touch silicone to the most important and most exposed parts of your camera, allow up to 24 hours for the Sugru to settle and then start throwing it around! Because of the material's special properties, it's capable of absorbing impressive amounts of shock.
It's of utmost importance that the creative urges of children are nurtured and encouraged. So instead of revoking camera privileges from your kids -- for fear of returning to a broken $300 device -- just slap on some Sugru and call it a day!