1 cup plaster of paris (do not pack)
               almost 1/2 cup cool water
               Liquid tempera paint in various colors
               (your kid's teacher may "donate" the paint in exchange for a few
               sticks of chalk)
               Margarine tubs or other disposable mixing containers
               Disposable molds
               (we used toilet paper rolls with tape covering one end to make a
               "cup")

               This stuff won't work on chalkboards, it's too hard, but it works
               great on sidewalks and lasts MUCH longer than store bought stuff. I
               made it for christmas presents this year for kids, and it worked great!
               Warning: this is a fun and messy project!

               Pour plaster into a container. Using a disposable stick, stir in most
               of the water. Add 2 or 3 tablespoons of liquid tempera, mixing
               well, especially at the bottom. Add a little more water so the mixture
               thickens, stir well, and pour into the molds. Remove the molds
               after the chalk is completely dry.

               Source: Amy Dacyczn's Tightwad Gazette II