Every time I have given these away, I get raves. And who doesn't like raves? Your kids will LOVE waking up to this and a good set of puppets on Christmas morning!
I have made several versions of this same thing, but basically you are going to make (or buy) curtains and then either use a spring rod (less expensive, but not as sturdy) or a shower-stall curtain rod to hang them in a doorway for an instant puppet show theatre! Both a spring rod and a shower curtain rod are adjustable, so just get one with a range of expansion that fits your doors. Two great things about this product are that it is portable (either from doorway to doorway or from your house to someone else's), and when your kids tire of it, you can simply fold the curtains up and put them in your linen closet. No big toys to store!
The first set I made were just two curtains made from silky purple fabric with yellow stars all over it- it sort of turned out like something for a magic show. But my kids loved them! I made them pretty long because you can adjust the height of the curtain rod depending on how tall the child is. Even my older kids (6 and 8) like to do magic shows and puppet shows. For this set, you can split the curtains so the kids can actually walk through them. (Great for introductions to performances etc.!)
If you've never made curtains, simply get a square of fabric (you want it to be at least 60" wide or up to two times the door width, and the length can be as long as long as you want!) and hem the sides first. Second, hem top and bottom. Then, fold the top down (creating a pocket) far enough that you can fit your curtain rod in the loop, and stitch along the bottom of the folded fabric.
The puppet show theatre in the above picture takes a little more effort, but not much. I simply made two curtains-one for the bottom and a shorter valance one for the top; and then I decorated them with ric rac. This particular set also has a clear pocket on the front so that my kids can put in 'signs' for their show depending on what they are using it for. We've used it for "store," "theatre," "show," and "circus." Once I figured out how to do these well, I actually sold them at a craft fair, and they were the FIRST product to sell out.